Saying NO to the electricity and water tariff review
The surprise surcharge review is unacceptable to all. It shows to what extent the administration is out of touch with the realities facing the business community and the middle classes.
It also appears that Prime Minister Lawrence Gonzi remains oblivious to the implications of this tariff review on the purchasing power of the general public.
Such a measure will spiral consumption to an all-time low, and push more people below the poverty line.
It will drive small businesses to extinction, and force many big businesses into a straitjacket leading to massive job losses. There is little to justify this.
Government has to find alternative, creative ways to increase revenues. Namely, the administration should start by cutting many of its extra costs.
Government agencies should be housed in one building. Street lighting should then follow the norms as in other countries.
Solar water heaters should be mandatory in all homes, as well as double-glazing in all government buildings with air conditioning.
The list of small measures is endless.
On the water front, the use of second class water should be extended most especially in those areas close to treatment farms.
The government should set an example and so should private industry. Until now, there has only been tokenism in this regard.
That a massive project such as Mater Dei Hospital, which cost the taxpayer hundreds millions of euros, should have completely ignored energy saving technology is itself a good example of our expensive habit of failing to pre-empt problems before they arise.
Viewed from this angle the tariffs revision is an equally catastrophic proposal, and no matter who suggests it and captains it, it should be opposed outright. It dwarfs the 1997 Labour proposal for a drainage tax, and will sap confidence and lead to great uncertainty.
Changes to the tariff structure are inevitable, but Minister Austin Gatt cannot apply his brusque and unsavoury style to every reform. Revisions to the electricity and water tariff structure will hit very single segment of society, and therefore must be approached with caution.
It has taken years for this country to confront and tackle monopolies and bad investment such as the white taxi regime and the dockyard.
For the government to put into place the water and electricity tariff structure now, when it has failed to upgrade and refine its water and electricity production into exclusively efficient systems, is irresponsible.
Besides, the government has moved very slowly in the water production sector. Take for example the percentage of unaccounted water: only recently, the figure of unaccounted water stood at around 40 per cent of all water produce. In the case of Enemalta, extensive maladministration in providing efficient energy supply with the best possible resources has been a resounding failure.
Government’s attempts to introduce an energy policy have not materialised and attempts to reduce energy usage are incredibly absent. All this talk of alternative energy is a joke.
The new tariff structure
Government’s new utility tariff structure, with its aim of fully recovering the costs incurred by Enemalta and Water Services Corporation, means that consumers will be paying twice for the electricity consumed by reverse osmosis plants to produce water.
As our front page report shows, the KPMG report presented to the social partners states that the total cost to the WSC for the production of water is €50.8 million, of which €10.7 million is the amount paid by the Corporation to Enemalta for its energy requirements.
This means that 21 per cent of the total cost of water Government intends to recoup from consumers is expenditure on electricity.
This expenditure is already reflected in the total cost of electricity production for Enemalta, which Government also wants to fully recoup from consumers.
Interestingly, our front page article shows that if the utility tariffs are introduced as announced, consumers would be shouldering the total cost of electricity production, as reflected in Enemalta’s bills, and then paying again for the portion of electricity which is consumed by reverse osmosis plants, as reflected in Water Service Corporation’s bills.
