High Tension, but...
Tempting to title on “High Tension,” but…
There is always a temptation to make the news more interesting than it is. That, in a way, is precisely what journalists are supposed to do, a mechanism that causes all kinds of trouble and tends by definition to cause every reader to accumulate a progressively less realistic vision of the world. So we’re going to low-ball this one. It’s a worthy note on unpaid utility bills.
There is though the kicker. Forty-three percent of Italy’s metropolitan and city administrations are not paying the tab for the electricity they consume. As a consequence, these debts are piling up and Enel – the former State electrical monopoly – is out at this point by around 305 million euro (about 405 million in real dollars) that it is not likely to see any time soon.
If the utility still belonged to the Government, this would be merely funny. As it stands, it is instead a kind of object lesson for eager investors. Enel is nominally a private company. The Italian Treasury controls 32 percent of the outstanding shares, while the other 68 percent are privately held. You might think those shareholders are getting screwed out of their part of revenues that are justly due to the company.
On the other hand, and this is the calculation of 3,531 of the 8,101 territorial administrations of the Italian government, as long as things are really in the hands of the politicians, ain’t nobody going to pull the plug on widows and orphans, health clinics, museums, the police department and the mayor’s office over a few unpaid bills. According to the “Corriere della Sera,” which pointed out the problem, the Sicilian city of Catania – to name one good case – has missed payment on 2,395 bills for a total of just under two million euro.
It’s not just municipal governments that have found what amounts to a new source of revenue by simply ignoring the power bill. The Corriere also mentions numerous hospital administrations, the Superintendency of Archeology in Tuscany, the Superintendency of Monuments and Galleries of Pisa, the Guardia di Finanza – the “Fiscal Police” – in the Piedmont and even parts of the Ministry of the Interior, which is supposed to be responsible for enforcing the law in Italy.
There is no real likelihood that the lights in the Tower of Pisa, or anywhere else, will be shut off soon. One of the reasons we so nobly, if vainly, attempted to avoid getting “high tension” into the title is that there isn’t any – tension, that is. This is one of those interesting issues nobody cares about here.
You see, it will all come out in the wash. Enel will just have to raise its rates enough to make the books balance anyway. And if it has gone whining to the newspapers about the issue, it is to make sure that this happens. Of course, it is true that the whole thing amounts to a sort of hidden tax on the entire population to cover the questionable management practices of what is still – though not by much – a minority of civil administrations.
As might be predicted too, the money being “saved” by not paying the bills is still finding a home, covering vital trips for mayors and aldermen to hit New York for the Columbus Day parade, for chauffeurs, film festivals, artistic fountains, tinted street lights and the other important accoutrements that help maintain the prestige of the State.
There are a couple of problems. One is that, this being “free” money, in the long run only very stupid public managers will want to continue spending it to cover mere utility bills. Can’t win a lot of votes that way.
The other difficulty is that there is more than some risk that the unpaid sum will eventually grow to dimensions that cannot be paid back at all, even if there was a will to do so. What do you do then? Retroactively declare that energy is free for public buildings?
Aside from the fact that this approach tends to make nonsense of what elsewhere might be known as “bookkeeping,” not to mention more elegant stuff like “budgeting,” it may be evident that in these circumstances you kind of have to be out of your mind to want to sell anything to the government.
This is already often the case. Big companies understand that they will have to pay a lobbyist – at the least – to make sure their invoices will actually, one day, be covered. But that’s just part of the cost of doing business, something to factor into the bid beforehand… The little outfits instead tend to go under while they wait for the check.