http://www.timesofmalta.

com/articles/view/20090117/local/model-correct-but-data-
accuracy-was-not-verified

Saturday, 17th January 2009

Model 'correct' but data accuracy was not verified

The exercise was carried out by auditing company Deloitte on

behalf of the Malta Resources Authority.

The study looked into the tariff structure compiled on behalf of the
government by auditing company KPMG.

The Deloitte report concludes that the model and methodologies

used in the drawing up of the new rates were correct. But, when the
report was issued, the accuracy of the data used to compile the
model had still not been verified and tested. In fact, it recommends
that MRA now test this data and the resulting tariff structure.

Deloitte said that "the key assumptions applied in the model

accurately tied in with the assumptions laid out in the KPMG reports
as amended by other official announcements and appeared
reasonable for the purpose of the exercise undertaken".

Deloitte recommended that the MRA undertakes a detailed review

of the most recent financial statements of Enemalta Corporation in
order to ensure that the costs included in the model accurately
reflected the current operating cost base.

Deloitte did not go into the workings of the eco reduction and how
the 1,750 unit threshold was established. It carried out its exercise
based on Enemalta's 2006, 2007 and 2008 unaudited accounts.

In fact, the report does not seem to answer any of the queries of
the 11 unions questioning the utility tariffs. The unions' questions
have to do primarily with whether the eco contribution threshold is
based on a realistic average of people's consumption.