SME Chamber calls for automatic compensation scheme after power cuts

Businesses should automatically qualify for compensation when prolonged electricity cuts cause them financial losses, the Malta Chamber of SMEs said on Wednesday.

The lobby group proposed setting up a “Business Continuity Compensation Mechanism” that would come into force whenever an electricity disruption exceeded clearly established thresholds.

It said the scheme should offer businesses a transparent and efficient way of claiming compensation for losses directly caused by prolonged outages, rather than relying on ad hoc procedures.

Such procedures could themselves create further stress and reduce productivity, the chamber said.

The proposal follows days of widespread power cuts as a heatwave pushed electricity demand to a record 741MW on Tuesday, placing sustained pressure on the distribution network, according to Enemalta.

The chamber acknowledged the “significant investment and continuous efforts” made in recent years to strengthen Malta’s electricity network.

But it said infrastructure would need to continue evolving as the country’s population, economic activity and demand for energy grew.

“For many businesses, particularly SMEs, power outages are far more than a temporary inconvenience,” it said.

The chamber said cuts could interrupt operations, disrupt production schedules, lead to cancelled appointments and cause lost sales, damaged stock and additional costs.

They could also undermine productivity and customer confidence.

The health and safety of workers was another concern, it said, particularly when employees reported for work after sleepless nights caused by power cuts during extreme heat.

Some of those employees may be required to operate heavy machinery, the chamber noted.

Residents affected by the latest outages have described sleeping in communal corridors, sheltering in air-conditioned cars and throwing away spoiled food after spending hours without electricity during temperatures exceeding 42°C.

Businesses have also reported losing customers and being unable to process card payments.

The owner of Vittoriosa restaurant Tal-Petut said diners had left because the restaurant had neither adequate lighting nor air conditioning, while the failure of card payment systems made collecting payments difficult.

The outages also interrupted a UEFA Conference League match at the Centenary Stadium in Ta’ Qali and temporarily halted the trial of Yorgen Fenech at the law courts.

The SME Chamber said its proposed compensation mechanism should complement, rather than replace, continued investment in the electricity network.

“Compensation should never be viewed as an alternative to infrastructure investment,” it said.

Both measures should form part of a broader national strategy aimed at reducing disruptions while ensuring businesses were not left to shoulder the financial cost of exceptional incidents, it said.

The chamber said businesses understood that no electricity network could be entirely protected from unexpected failures.

However, modern economies required systems that both reduced the risk of disruption and offered fair and timely assistance when outages occurred.

The Nationalist Party also called for an automatic compensation system on Wednesday, saying payments should take into account the duration of outages, damage to equipment, lost stock and sales and the forced closure of businesses.

The Malta Hotels and Restaurants Association separately called for a national climate resilience and energy security plan covering electricity infrastructure, backup generation, emergency preparedness and contingency planning.

The SME Chamber said it was prepared to work with the government, Enemalta and other stakeholders on measures to strengthen infrastructure, improve business resilience and safeguard the competitiveness of Maltese enterprises.