As Brussels says no to surcharge capping, government conveniently blames GRTU’s Vince Farrugia

High government circles are conducting what has been described as a whispering campaign to blame Vince Farrugia, the director-general of the Chamber of SMEs (GRTU), for having ruined any chances for government to cap rising energy bills for big industry and hotels.
The decision in 2005 to cap the high costs for energy and water for certain industries and hotels sent Farrugia on the attack when the favourable billing scheme did not cover every single enterprise, claiming it was discriminatory.
And since the capping on energy costs for big energy users such as factories and hotels is effectively a government subsidy, it also goes against EU law – something that both Lawrence Gonzi and his then junior finance minister Tonio Fenech were aware of.
With Farrugia contending that the scheme was discriminatory, the GRTU called on the EU to look into the matter, which in turn communicated to the Maltese government to stop the capping of the surcharge.
Yesterday, leading industrialists told MaltaToday that senior government ministers were telling them to “blame Vince” for the fact that the proposed energy tariffs, which will bear the full energy cost, will have no capping.
But even though Vince Farrugia’s inquiry with the European Commission may have raised eyebrows in Brussels, sooner or later the Commission would have raised the matter with Malta to get in line with its strict EU policy on state subsidies.
Repeated attempts to get in contact with Vince Farrugia yesterday proved futile.
In 2005, the GRTU requested the Office for Fair Competition to direct Enemalta Corporation and the Water Services Corporation to extend their favourable billing scheme, reserved only for enterprises in the licensed accommodation sector, to all enterprises “irrespective of the sector in which they operate”.
The GRTU contended that the scheme was discriminatory to enterprises in other sectors and was issued “on the strength of the monopoly enjoyed by both corporations”.
The GRTU was adamant in its opposition to the capping, saying the tariffs and the energy surcharge itself constituted breaches of the European Directive on Electricity, which prohibits cross-subsidisation or discrimination in payment on energy usage.
Vince Farrugia also accused government of not being transparent over how Enemalta was purchasing its fuel oil, and the workings behind the surcharge on the electricity bills.
In 2006, the GRTU presented a formal request to the European Commission to investigate the surcharge capping in a bid to revise the exercise.
Farrugia had also accused the Malta Resources Authority, which is the national regulator that monitors any price increases on utilities, of sitting on the fence throughout the entire saga.