SME Chamber proposes Business Continuity Compensation Mechanism for electricity disruptions

The Malta Chamber of SMEs is proposing the establishment of a structured Business Continuity Compensation Mechanism that would automatically come into effect following electricity disruptions that exceed clearly established thresholds.

Localities across the country have experienced power cuts over the past days as Malta passed through a heatwave.

Such a mechanism should provide businesses with a transparent, predictable and efficient means of obtaining compensation for losses directly attributable to prolonged power outages, without requiring adhoc processes that could themselves cause further stress and loss of productivity, it said.

It said that such a mechanism should complement the continued investment in Malta's electricity infrastructure. “Compensation should never be viewed as an alternative to infrastructure investment. Rather, both should form part of a comprehensive national strategy that seeks to minimise disruptions while ensuring that businesses are not left to shoulder the financial burden when exceptional events occur,” it said.

Businesses understand that no electricity distribution network can ever be entirely immune from unexpected failures, the Chamber of SMEs said in its statement. “However, modern economies require systems that not only reduce the likelihood of disruptions but also provide fair and timely support when they occur.”

Earlier this week, Chamber of SMEs President Paul Abela said that if a business suffers a cut for more than an hour, they should be compensated for the whole day based on the average they would have sold.

The SME Chamber also acknowledged the significant investment and continuous efforts undertaken over recent years to strengthen Malta's electricity distribution network. “It is evident that substantial work has been carried out to modernise infrastructure, improve resilience and respond to the increasing demand placed on the national grid.”

“At the same time, the recent power outages experienced across multiple localities once again highlight the importance of ensuring that national infrastructure continues to evolve in line with Malta's economic and demographic growth. As the country's population, business activity and energy demand continue to increase, investment in critical infrastructure must remain a national priority.”

It explained that for many businesses, particularly SMEs, power outages are far more than a temporary inconvenience. They result in interrupted operations, lost sales, damaged stock, cancelled appointments, disrupted production schedules, business productivity level and additional operational costs, it said, noting that in such cases Interruptions can have significant financial consequences and impact customer confidence. Furthermore, employees turning up for work after sleepless nights, with some handling heavy machinery, does not help the business function safely and efficiently.”