The interview with Minister Austin Gatt is worth some comment on the whole business of electricity and water tariffs and connected matters.
First things first: if Gatt’s brief is full cost recovery pronto, then there is little room for manoeuvre. In fact Gatt is caught between Scylla – the Frank Portelli case against capping – and Charybdis, the up-coming budget.
There is then the full frontal assault from commerce and industry, with threats of lay-offs, partly offset by Dr Gonzi’s remark that if these charges are not levied, there can be no expansion of the University and MCAST.
Now to the numbers: the original annual allowance of 1,300 units per capita was supposed to come from Denmark and Spain: but only Demark is mentioned in the KPMG report (p.12). Yet such a comparison is useless without information on modes of energy use in Denmark. In fact, the Danes use gas for house and water heating and do not, as yet, use air conditioners in summer. Water heating and air conditioning represent major uses of electricity here.
Other “numbers” were mentioned by Gatt: “The average consumption in Malta [said to be among the lowest in Europe] is around 1,500 to 1,600 units of [electrical?] energy. In France the average consumption amounts to 2,300 units of energy.”
Though not specified, these figures must refer to annual consumption per capita. The KPMG report (p.49) in fact shows only France with more than 1,600 units per capita: the European average is 1,536 units. Going to annual units per household – with a total generation of 2.3 billion units in 2006, of which households used 36% – the 190,000 accounts take up an average of 4360 units, again placing us in the middle of the EU league.
Of the five options presented, the first has no eco-rebate included; the other four have. Looking at the residential sectors, all options will result in bills significantly higher than the present 95% surcharge regime. The much-trumpeted Eco-reduction is not all that hot either. A family of four in the 3,000 – 4,000 unit bracket will have a €380 increase over the 95% surcharge regime without eco rebate, and around €240 on two of the rebate schemes. The key question remains: will those not paying surcharge pay the new charges?
Moreover, increase in the rates above the eco-allowance ensures that the prodigal, like Gatt himself are proportionately less hard hit than “the frugal”. A first reason for this is the doubling of meter rents (both water and electricity), which hits everyone alike. Then a five-person household in the 12,000 – 16,000 unit bracket on option 5, will have a €725 (31%) increase in electricity bill alone, while the same option for a two-person household in the 3000 – 4000 unit bracket will have a €306 (68%) increase. Incidentally, for option 5 – said to be favoured by Gatt – no number of accounts that fall within the scheme is given in the KPMG report. So where did the 109,000 qualifiers come from?
Some other points are worth mentioning. KPMG seem to have worked out the day-night tariff difference purely on revenue return. But for any industry to make a major demand shift from day to night, it must first have processes than can be switched, and then it must be sure that the increased wage costs associated with night work are at least covered by the lower tariff. The KPMG differences are not very tempting; but one situation that should be re-explored is the possibility of shifting R.O. operation predominantly to off-peak hours.
The proposed tariff adjustment mechanism is not very transparent; there is mention of “other costs” apart from that of fuel. What about the running costs of the proposed desulphurisation plant at Delimara? Will these be factored in?
On wind and water, Gatt takes the view that they are not his responsibility, even if that stance was modified in his Wednesday 15 October offering in The Times, where he put aside the old dream of French nuclear electricity coming down the Sicily cable and happily converted to Sicilian wind.
We, on the other hand, we are no longer “on track” for a deep-water wind farm: shallow waters are now in favour. Gatt can ask cabinet colleagues what costs are like and, what they would be like if we actually quit the sea and came ashore. He could be pleasantly surprised with the answer to this last question.
On ground water and boreholes, I certainly think that Gatt’s view is correct: what...

..should be done quickly is to.. register all boreholes, install meters, set a limit on private borehole production and charge for every cubic metre. On second class water (SCW), however, he is forgetful and incurious. The extended use of second-class water (SCW) from Sant’Antnin (SA) in industry and agriculture seems to have been forgotten. Has the area around SA become a salt desert, or was that water not heavily saline? More to the point why does Gozo SCW have 840mg/litre chlorides and north Malta SCW even more?
The question is not trivial, as salinity has rendered SCW useless for agriculture without further treatment at a time when water resources are under heavy and increasing pressure. Gatt is correct in saying that polishing would be required to get SCW up to irrigation standard. As for the farmer not wanting to pay for it, surely farmers can spare a little of those €8 million another minister claimed to have obtained for local farmers from the EU last year.
But then the Water Services Corporation – a Gatt responsibility— is, on its say-so, polishing borehole water for Gozo farmers. Are they paying extra for it? Or indeed are they paying at all?
One final thought on water: Minister Gatt has in his keeping the fate of the Mizieb water source, providing 6 million cubic metres of low (300mg/l) salinity water annually. Can he be persuaded to forget the trans-European network tunnel boring into Mizieb ridge?

Prof. Edward Mallia
Attard

PRINT THIS ARTICLE