Fabian Demicoli

Ides of March

On Wednesday 4th February I attended for an important meeting with Malta Resources Authority. On the Agenda was GRTU's claim for revision of the electricity and water tariffs hastily imposed by Government in October. I strongly contend that Malta Resources Authority are failing miserably to understand their role as the guardians of Maltese consumers and users of electricity and water services. The whole charade that has besmirch Gonzi's Government so badly could have been avoided if MRA had the guts to stand up and prove its worth. Instead MRA was practically absent till after the 5th December 2008 when Legal Notice 330 of 2008 imposing the new electricity tariff regime was published by the minister responsible for MRA who at law is supposed to act on the advance of MRA. I am not aware that MRA had till then issued a single note or statement to Enemalta or the Ministry for Resources stating its approval or non approval of the tariffs. MRA is not only the authority that approves new tariffs but is the authority obliged to conduct an Impact Assessment on a major event as the introduction of a new electricity tariff system. The EU Commission issues specific guidelines to authorities like MRA on how to conduct an Impact Assessment.

I love the EU model based as it is on dialogue, consultations and the protection provided by Public Regulators. But for the model to work we need more and more people of calibre. People must be given the chance to learn and grow. I am in no doubt that Ing Joe Ellul, Chairman of MRA, can grow to face his obligations and provide the public with the protection it seeks. But Government should have never appointed a new person to a new post and then loaded on him a monster of a package to decide upon when he had hardly the chance to learn the rules. The result is, alas, what we all now know. We have an MRA who has gone round in circles trying to manage the mess imposed upon it by people who preferred to disregard the EU model and now MRA can only aspire to move to the future hoping to act in a manner that makes people forget the recent past.

What MRA now hopes achieve is to review the electricity tariffs taking into consideration the changes to the prices of petroleum products since Austin Gatt's Tariffs were published. MRA is also expected to evaluate all complaints raised and then include all its assessments in a revised tariff regime effective from end of March. In the new tariffs will remove any additional burdance that would have been proven to have been included in the tariff regime in operation since October 1st. This is the issue that confused the 11 trade union leaders. MRA will not review the current tariffs as these are based on petroleum figures and other considerations produced up to September 2008. MRA refuse tariffs not on future prospects but backwards. They see what went right or wrong in the previous six months and produce a new tariff structure based on actual facts as they transpired during the current six month period. In practice the new tariffs will correct any previous exaggeration. But the impact will be forward not backwards.

The longest list of complaints presented to MRA on the electricity tariff structure imposed by Government since October have been raised by GRTU. Small and medium enterprises are currently the worst hit victims of the electricity tariff regime imposed by Government on 5th December 2008 by Legal Notice. On behalf of small businesses we complained with MRA as soon as Austin Gatt first presented the new tariffs in October. Incredibly while we presented our complaints publicly in two press conferences and in a meeting with MRA, in a meeting with the Prime Minister and the Deputy Prime Minister and in writing also to MRA, Enemalta continued to advertise on it's website the old electricity tariff rates oblivious of the fact that Austin Gatt without issuing any Legal Notice has stated that the new tariffs will be applicable from 1st October 2008. Enemalta was of course right. It could not publish electricity rates that were not backed by Legal Notice and did not carry the approval stamp of MRA.  Businesses men could not be blamed if they continued to quote their prices based on the tariffs advertised by Enemalta. Yet, Enemalta cheekily started as from October charging the new rates even though legally they had no power to do so. GRTU requested MRA to stop this abuse but what happened was that in November the old rates disappeared and the new rates were only made available by Legal Notice on 5th December.

At the same time the workers Trade Unions raised their complains as to how families were going to be affected by the new rates and the Chamber of Commerce and the FOI speaking on behalf of large enterprises complained that the largest employers were being badly hit. Incredibly, the Government fiddled a little with the tariffs and giving big business some relief and polished up the rebate scheme for households. Without losing any income expected from the October tariff structure. Someone had to carry the brunt for the advantages given to these households and to big business. The burden was loaded all on the back of owners of small and medium enterprises. They already headed bad in the first set of new tariffs. Now their burden was further increased. MRA who was supposed to have studied GRTU's complaints and reduced the burdens hastily imposed by Minister Austin Gatt, idly stood by and approved the imposition of additional burdance on SME's as follows:

 

Units Used                28th October           5th December          Difference

0-2000                        0.128                          0.147                          +15%

2001-6000                 0.136                          0.155                          +14%

6001-10000               0.149                          0.168                          +12.7%

10001-20000                        0.164                          0.183               +11.5%

20001-60000                        0.181                          0.200                +10.4%

60001-100000          0.166                          0.185                            +11.4%

100001-1MIL                        0.153                          0.172                  +12.4%

So MRA had a complaint from GRTU that the new tariffs announced in October were discriminatory against printers, workshops, butchers, supermarkets, mini markets, fish shops, cold stores, confectioners, sprayers, food traders, restaurants and all other producing a product or a service with a high electricity content, and rather than evaluating this complain and recognizing the discrimination against small and medium enterprises. MRA shamelessly approved the further increased load on the already suffering small businesses.

On 16th January 2009, six weeks after the publication of the Legal Notice by the Minister responsible for MRA, the MRA issued a public statement saying they had approved the new rates.  MRA expressed their satisfaction that the figures on which the new tariffs regime was based "appear to have been correctly configured", that the "key assumptions …. accurately tie in" and that "the resultant outputs generated by the final KPMG Report as amended by subsequent changes agreed with the constituted bodies, have been correctly transposed in the Draft Legal Notice".

I've never seen such bare-faced statements.  We have been complaining from day one.  We have presented the analysis and what's wrong with the KPMG backed new tariffs. We have complained officially to the MRA that the rates were unacceptable and discriminatory to small and medium businesses, now MRA had the audacity to state that everything is fine with the Legal Notices published six weeks earlier and that all this was "as agreed with the consultant bodies".  Incredible! We acted as one of the countries, five national constituted bodies members of MCESD representing the largest cross section of small and medium enterprises and MRA states that the additional punishment inflicted on SME's was "as agreed with the constituted bodies". Even Prime Minister Lawrence Gonzi denied his grotesque falsehood.

Now we have been told to wait till March. Perhaps MRA will change something. Till then say a prayer. Perhaps someone up there will help the lot on top to see straight.

 

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