Richard Bilocca wants to talk shit. He wants to explain why after six years of profits, the Water Services Corporation still needs a government subvention, and that it is going to go up yet again next year, from €17.2 million to €19.3 million, even though the corporation had a record turn-over.

The issue is not water production but the cost of providing drainage, for which people are not directly charged, as well as the various environmental services provided by the corporation.

“We do not make a loss on the production of water – in spite of the fact that the tariffs are socially engineered to encourage lower usage,” the CEO told The Sunday Times of Malta.

The corporation, which until 2003 had only provided and distributed water, had taken over the Drainage Department pretty much lock, stock and barrel. And the costs there have been getting higher and higher, reaching about €18 million a year.

This is because treatment of the sewage has become much more expensive since EU accession dramatically raised the standards. Sewage treatment is also, Mr Bilocca stressed, a very energy-intensive process. 

Actually, the €8.2 million was what we achieved. The estimate for the year had been €1.4 million

“If we were to add up all the services that we provide over and above tap water and sewage, you will probably find that the subvention should be even greater!”

The CEO took over in 2017 – the sixth appointee since Labour came to power – facing doubts over whether he would succeed in improving the situation.

He has overhauled the “very fragmented” hierarchy, which before consisted of seven directorates. “We have a much more logical structure now, with directorates far better defined to ensure more seamless operations and to remove the silo effect.”

The corporation has a headcount over 1,100 – with 222 people added before the general election in 2017. This pushed the wage bill up and it now represents 33 per cent of costs, from 29 per cent in 2015.

He insisted all the staff are being “fully deployed”, with some areas where resources are actually stretched.

“We now have a much more dynamic workforce,” he said, adding that training was the key.

The WSC’s annual report, recently presented to Parliament, said the estimated operational profits for 2019 were down to a €3.4 million from the €8.2 million reported for last year.

He smiled: “Actually, the €8.2 million was what we achieved. The estimate for the year had been €1.4 million. And next year’s should also be just a projection. We did better than forecast…

“Having said that, we are ploughing considerably more money into improvements and we have unprecedented levels of expenses to cover not only maintenance on crucial sites but also capital expenditure.

“We certainly do not need to review our tariffs. However, instead of passing the savings that result from better efficiency on to the consumer in a monetary way, we are doing it by passing them on as improved service.”

Five facts about water supply

■ The Water Services Corporation employs 1,100 people, representing 33 per cent of its costs.

■ It made a profit of €8.2 million last year.

■ 50 dispensers of treated sewage water have been installed in agricultural areas, with the figure set to rise to 400.

■ Reverse osmosis water is slightly acidic, so it has to be treated with alkaline before being distributed.

■ Some reverse osmosis water is blended with 40 per cent groundwater.

Plugging those leaks

The corporation is tackling water production on various fronts. The first one – and arguably an environmental priority – is to reduce the depletion of groundwater before the situation becomes irreversible.

One measure is to provide farmers with an alternative, particularly since they cannot use chlorinated water: so-called ‘new’ water. Once sewage has been treated – to just short of the fully potable ‘gold’ standard – it is being made available via dispensers placed in agricultural areas: 50 so far, with the intention of increasing them to 400.

“Rather than pumping treated water into the sea and losing it, this can be used for agriculture – even on raw crops like lettuce and strawberries!” he said, noting that seven billion litres per year were available.

The government is encouraging take-up by offering the first consumption band free of charge (reimbursed to the corporation by the government), followed by a progressive tariff.

“This has been a tremendous success with very good take-up in spite of initial reluctance.”

With regard to potable water, one of the main thrusts over the past decade or two has been reducing leaks, which used to account for some 60 per cent of all the production. Overall production is now half what it was in 1995, in spite of the burgeoning demand, all thanks to the dramatic reductions in lost water.

Mr Bilocca said the leakages are now so low that it costs as much to tackle them as the lost water itself costs, although there was no room for complacency.

With a rapidly growing population, the corporation is keeping an eye on trends. It has projections on demand up till 2050.

The capacity of the Maltese reverse osmosis plants is increasing, but he described the new one on Gozo – which will produce six million litres a day, with a capacity of nine million – as a “game changer”. The island, he pointed out, had been left for a whole week and a half reliant on groundwater because the undersea cable that linked it to Malta was damaged by February storm.

Another priority is to reduce the energy required by the reverse osmosis plants, which was 10kWh per 1,000 litres in the 1990s and is now 2.8kWh.

Why are we still drinking bottled water?

Mr Bilocca caught us looking at the bottle of water on his desk and cringed.

“It’s embarrassing, I know. I cannot drink from my tap here in Luqa! But things are changing,” he said.

The problems with tap water are somewhat technical. Pure reverse osmosis water is slightly acidic, so the supply to places like Pembroke and Sliema – which get it direct from the RO plant – is treated with alkaline chemicals, as it would otherwise eat away the pipes. Other areas have it blended with groundwater, in a 60-40 per cent ratio. The groundwater will be reduced to 30 per cent in the near future.

The corporation is tackling this in two ways: fibreglass pipes which are corrosion-resistant and a blending plant at Ta’ Qali. This is fed by tunnels from four directions, which will allow all the RO water to be blended, diluting the salt from the groundwater and meaning no alkaline chemicals are required.

Within two years, Mr Bilocca hopes that the bottle on his desk will no longer be needed.

“We already provide water. Now we are focusing on making the experience more pleasurable, because people deserve it.

“An improvement in water is an improvement in the quality of life. Just ask the mother of a young child or an elderly person who has to lug around six-packs of bottled water! Never mind the impact of the plastic on the environment. Whatever it takes we are going to do it.”