The liberalisation of the energy distribution network is not a matter of “if” it will happen, but “when”, PN MP and spokesperson for energy Mark Anthony Sammut said.

In an interview with the Malta Independent on Sunday, the MP said that it would be “madness to liberalise the (energy) distribution network now with the current situation”.

Before this liberalisation takes place, Sammut said that there is a need for a lot of preparatory work to be put in place, including a regulatory framework to be set up. That is why the PN’s proposals are also framed with that final outcome in mind, he said.

Last month the Nationalist Party presented nine proposals for what it said would lead to the strengthening of the country’s electricity grid and distribution. One of the main proposals is the liberalisation of the energy distribution sector.

The proposals were drawn up after Malta went through a harrowing period during which several localities were without power for many hours, some more than a whole day. The government and Enemalta blamed the crisis on the heat wave that was hitting the islands at the time, with temperatures rising above 40 degrees Celsius for more than a week.

In the interview, Sammut highlighted that apart from improving the current situation in the short-term, the PN’s proposals will cater for an easier transition when the liberalisation of the electricity distribution network happens.

He said that the argument Malta is isolated from the European grid does not hold water anymore, adding that “we have the interconnector; a second one is coming up and we are planning the third one to north Africa, so the argument will no longer hold in the future,” he said.

“We cannot continue planning from one election to the next and lead in a management-by-crisis mode; we need to plan ahead for what is to come,” he said.

He said that in order not to have a negative effect, groundwork needs to be prepared. “We need to start with a wide consultation process with all stakeholders”.

Sammut said that the success of any liberalisation process is dependent on how strong the regulator is. He said that Malta already went through such processes with success: the LPG gas cylinder market and the fuel sector are liberalised with prices still being under strict control. He said that with regard to the LPG gas cylinder market there was a clear improved investment in the infrastructure, which despite creating more jobs did not increase the prices. Prices are approved by a regulator, and government is still able to subsidise the cost when needed, as it is currently doing.

Sammut said that the liberalisation of the power distribution network will not mean an increase in prices. “It’s complete hogwash that liberalisation means increasing prices, it only happens if you let it be an open unregulated free market,” he said.

 

The PN’s proposal for liberalisation received criticism from the Labour camp. Last month PM Robert Abela pointed out that the PN’s proposal to liberalise the energy distribution sector are efforts to increase competition for “Enemalta workers”, despite them “having worked tirelessly in the last few days”.

 

With regard to competition, Sammut said that there are many positive outcomes from the liberalisation of the distribution network such as accelerated improvement in the network and the use of emerging new technology “to give a better service to customers”.

 

He said that currently Enemalta is the only monopoly in the sector, and it is not even completely State-owned any more. It is part-privatised, and Shanghai Electric holds part of that monopoly.

 

The PN MP said that certain changes need to be introduced not only to prepare for liberalisation, but to protect customers from the current monopoly even now. Today, customers who are not receiving a good service, “have no one to protect them”. That is why one of the first steps which needs to be introduced is for the regulator to be able to impose a certain level of service availabiity on the operator, for the benefit of the consumer.

 

Sammut also reiterated the PN’s pledge to keep utility bills prices as they are. He said that there should be recognition that the effect of increases in the prices of utility bills can cause a greater inflation problem and increase in the cost of living.

Referring to the country’s financial situation during the Covid-19 pandemic and beyond, he said that the European Union was today more lenient on its individual members’ debt and deficit during a time of crisis.

He said that during the PN’s time in government between 2008 and 2013, European countries were forced to keep the deficit under 3% and excessive deficit procedures were initiated if the deficit went up to 3.1 or 3.2%, notwithstanding the international financial crisis.

However, Sammut said that the European Union “learnt its lesson from previous mistakes” and that is why it was more lenient now.

He said he believed that a PN administration would have been able to keep the deficit lower than the “threefold” increase registered by the Labour government during the pandemic.

“There was a lot where the government could have done to keep the deficit from exploding how it did,” he said.

For example, he said that the fact that the government increased the number of Ministers and Parliamentary Secretaries to almost “double” what it was under previous PN administrations, and the thousands of persons-of-trust, mean that more money is spent by the administration, especially in terms of auxiliary staff that are employed in various ministries and parliamentary secretariats.