PN: PL energy plan results in 5% tax rise
Minister for Finance, the Economy and Investment Tonio Fenech, explained that a report from KPMG shows that the PL’s energy proposal will in fact raise taxes by 5%.
The Minister said that KPMG was hired by Enemalta to look into the PL's proposal as an independent contractor in order to eliminate any political bias. Tonio Fenech argued that DNV Kema had explained that the best system to implement regarding a changeover to gas is not the use of tankers but the pipeline as the PN recommended.
The Minister said that related projects will cost €200 million more than the PL have outlined since they do not cater for particular costs. These costs include having dedicated ships which are not available for rent but must be built.The Labour's proposal generates 40% of energy from Delimara Phase 2 converted to gas, 40% from the new plant and 20% from the interconnector.
The Minister added that the cost will actually be 10c8 in addition to the EU duty on energy, bringing it up to 12c5. In total, it would cost Enemalta 19c2 to distribute a single unit of electricity which is higher than the present cost, he announced.
“There is no 10-year-energy agreement where the price of energy remains the same and the only way Labour can reduce tariffs would need to raise other taxes,” Tonio Fenech argued. The Minister stressed that it would take years for the appropriate studies regarding safety, implementation and construction to be completed, so the project would conclude at roughly the same time as the proposed gas pipeline.
The Minister confirmed that studies are currently underway for a large offshore gas terminal to supply most of Europe. “This is another reason why a gas pipeline is the best way forward as it will connect us with the rest of Europe,” Minister Fenech held.
The KPMG study is available here.