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James Debono
The Water Services Corporation is paying only a third of the cost of electricity required to generate its reverse osmosis plants – which supply 60 per cent of Malta’s water demand, and account for six to eight per cent of Malta’s energy consumption.
This is a clear indication that the price of water paid by consumers is heavily subsidised by Enemalta.
According to Enemalta estimates for the current financial year, the cost of producing one unit of electricity is calculated at 6c2. But Enemalta only bills WSC a paltry 2c3 per unit during the day, and 2c5 per unit at night.
This results from the Water Services Corporation’s reply to questions sent by MaltaToday.
The Water Services corporation is already directly subsidised through a government subvention of Lm 10 million a year.
The lower-than-cost electricity tariff accounts for an additional LM 4.2 million a year. This calculation is based on an average RO production of 20 million m3/year.
If passed on the the domestic consumer, these LM 4.2 million will result in an increase of 33c per cubic metre of water billed.
According to Carmel Delia’s report, Economic Considerations Regarding Markets for Water in the Maltese Islands (2004), the average consumption bill for domestic households is 34.08c per cubic metre.
This means that, if one were to remove Enemalta’s electricity-for-RO water subsidy, the price for the consumer will double. And if the Lm 10 million subvention is also removed, prices will quadruple.
RO production is expected to increase because of deteriorating groundwater quality and limitations imposed on groundwater extraction by the Water Framework Directive.
Currently, Malta extracts 40 per cent of its drinking water supply from ground water sources.
The decrease in ground water extraction means increasing reliance on RO water. Over the past years, WSC has been reducing ground water, which is always mixed with RO water to keep within EU limits on nitrate levels.
The WSC will also see an increased cost of operating the new sewage treatment plants, to come in line by end 2008.
It will also have to pay the cost of purchasing emission credits, as per the Emissions Trading Directive, after 2012.
A recent report by the United Nations Food Agriculture Organisation warned that water bills could double if no action is taken to protect ground water sources and Malta becomes relient on RO water.
All things told, Malta could be on the verge of an explosion in water prices in the not too distant future.
jdebono@mediatoday.com.mt |
