Monday, April 18, 2005

Opposition fires broadside at Government

Water price increases

With Government estimates set to be tabled in the House of Assembly in just over a week’s time the Opposition has fired a pre-Budget broadside at Government’s fiscal policy and the decision to increase water charges.

It described the increases, which apply as from this month, as “totally unjustified”.

The GSLP/Libs Opposition says that the water supply is provided under contract by AquaGib and the company receives a subsidy from the Gibraltar Government by way of compensation for the price increases it is not authorised to make.

”The accounts of the company show this subsidy as having increased by £160,000 in 2003 and by £40,000 in 2004. It follows that the level of annual increase required by the company, replaced by an increase in the subsidy, has been relatively small compared to the increases resulting from this months new rates.”

According to them the argument of the Government that there have been no increases in charges to consumers for 20 years is completely irrelevant.

“Even before the increased rates introduced this month came into force water costs in Gibraltar were way above costs elsewhere. This means that in the last 20 years our water charges, by not going up, had merely closed some of the gap that previously existed when compared to the Campo Area,” said the Opposition.

The decision to maintain water charges fixed for the Domestic Consumer and the Business Consumer has, it says, secured the purposes of keeping down the cost of living and of providing services when faced by competition from the hinterland.

”Increasing these charges makes no economic sense whatsoever. It only results in increasing the cost of living in Gibraltar and making business in Gibraltar more expensive, and increases the prospect for growth in cross-frontier workers and services. This is not in Gibraltar’s political or economic interest.”

The increases announced are merely a revenue raising measure to raise money for the Government and are totally unrelated to increases in operating costs for the current year by AquaGib, said the Opposition adding that the increase will probably lead to the Government reducing by as much as £500,000 the annual subvention to the company.

The Oppositon adds that the cost of the Secondary Units to the Domestic Consumer is now 52p for 100 litres, making it one of the most expensive in the World, and on top of that the Fixed Meter Charge has gone up by 100%.

“The Opposition voted against the changes in the law that paved the way for these increases to be done by regulation and would have opposed the increases if they had been brought to the House of Assembly as part to this years budget,” commenting on the situation Opposition spokesman on public utilities Lucio Randall.


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