On the referendum and parastatal
Economic Services Minister Josef Bonnici reflects on
the result of the recently held referendum and finds that it takes
some cheek for Opposition leader Alfred Sant to instruct on democracy.
He also outlines major developments at some of the corporations under
his remit including the shipyards, Air Malta, Gozo Channel, utility
rates at Enemalta and at the Water Services Corporation
It takes some cheek for any leader of the Malta Labour
Party to instruct anyone on democracy. Alfred Sants bogus call
was more reprehensible in the light of recent monkey business, when
he tried to mug the democratic process, declaring a referendum victory
that was not his to claim. The truckloads of Labourites put on the streets
to celebrate their partys defeat in the referendum was a flashback
to the Labour administrations of the dark Eighties.
It seems that Dr Sants characteristic stubborn trait has led him
to the conclusion that the best defence is to go on the offensive -
even though this seems to leave rational judgement far behind. Beaten
at the referendum, he prodded his supporters into unwarranted celebrations.
Accused of provoking instability, Dr Sant again went on a misguided
offensive, attacking the pro-EU side for daring to celebrate its victory.
Condemned for not respecting the democratic process, what was Dr Sants
response? He called on the Prime Minister to respect the democratic
process! Criticised in the newspapers where he and his circle occupy
substantial column space, he attacks the integrity of those same newspapers.
It would be funny were it not for the fact that we happen to be on the
eve of a pivotal election.
This misguided diversion should not hinder the rational assessment of
the track record. During the last four years, the Ministry for Economic
Services has been involved in intensive work on many fronts. We restructured
the Ministry to better serve the Maltese business sector. There is a
vastly improved capacity for the compilation of national statistics.
In the areas of consumer protection, product standards and market surveillance,
long overdue improvements are bringing about changes that are taken
for granted in a developed economy. It is a process that takes us up
to EU standards. It would not have happened under a Labour government.Conintues
on page 10
Considerable progress was achieved across the public entities, including
the shipyards, long seen as presenting some of the most intractable
problems. Dishing out endless subsidy cheques to the shipyards has been
a heavy and unsustainable burden on the economy. At the same time, the
social dimension of shipyard employment cannot be ignored.
At last, all stakeholders have accepted a restructuring plan for the
shipyards. It puts into effect a strategy that turns the yards into
a viable enterprise - one that sustains employment while cutting the
entitys heavy financial burden on the economy. Another indicator
of the integrity of the plan is the EUs recognition of its seriousness.
The plan is already being implemented. We put into effect an early retirement
scheme that resulted in workforce reduction of 700. By October 2002,
only 78 of these were looking for employment. Moreover, the restructuring
plan identified niche areas for future growth. These include ship repair,
ship conversions, steel structures, yachts and super yachts.
In contrast, look at the Labours Partys non-plan for the
yards. The partnership ads promise continued subsidies, even though
the last Labour government, with the same Dr Sant at the helm, accepted
EU state aid rules as recently as 1998. The facts show that Dr Sant
has no idea of how to deal with this problem, and to cover up the absence
of a solution, he is promising the undeliverable.
Gozo Channel and Air Malta
Three new ships now ply the waters between our islands. They were built
in our shipyards - testimony to the skills of the shipyards workers.
Malta has some of the best docks in the Mediterranean. They are part
of what makes the yards such an important asset that must be put to
The new boats replace the old and tired ferries that were inappropriate
for todays travellers. They were particularly incompatible with
the upscale tourists that Malta increasingly attracts. These new ships
provide safer and better service to all of us, and they contribute to
an improved foreign perception of Malta as a tourist destination.
Air Malta makes a decisive contribution to incoming and outgoing tourism,
and the quality of Maltas air link with destinations abroad is
equally important for our attractiveness as an industrial location.
Very recently, Air Malta finalised the lease of a new fleet of airplanes
at exceptional lease rates for the next ten years. This will enable
Air Malta to deliver a better product, and also help to strengthen the
perceived value of Maltas tourist package.
What are Labours concrete proposals for Gozo Channel and Air Malta?
As regards Air Malta, Labours only ambition is to switch responsibility
for this entity to a different Ministry. As regards Gozo Channel, Labour
has an unhappy track record. Labours attempt to cancel the construction
of new ferries is a prime example of simply being contrary, to the detriment
of the shipyards and Gozo. To top matters, Labour in government increased
massively the Gozo Channel tariffs!
The last Labour administration will long be remembered for the sharp
increase in water and electricity tariffs. Labour was not about to spare
consumers and industry the shock of those unnecessary increases. Consumers
and industry were saved by the 1998 election, after which rates went
down to more sustainable levels.
That Labour administration had stiff water and electricity tariffs scheduled
for as far out as 2001, and they would have been far higher than those
prevailing today. The gap between the two tariff regimes depends on
household size. For a one-person household, Labours tariffs were
77 per cent higher, while a three-person household would have paid 50
per cent more. The gap is narrower but substantial for a six-person
household, for whom Labours rates were 47 per cent higher.
We are waiting for Dr Sants promise that he will desist from similar
shocks in future.
During the last four years, Enemalta has invested heavily both in distribution
and generation capacity. New distribution centres are being set up in
Mellieha, Mosta, Valletta, Marsa and Kirkop. The utility has also taken
a serious stance on electricity theft, with a resultant drop in unbilled
Enemaltas emissions are coming in line with EU standards. This
is being achieved through the installation of precipitators, which trap
dust particles, and through the use of better quality fuel oil. Diesel
now has lower sulphur content, while leaded petrol has been completely
Reduced water tariffs were made possible because we were committed to
decrease wastage in the Water Services Corporation. The governments
subvention to the WSC has fallen from Lm14 million in 1998 to Lm8 million
in 2001. Reduced water leakage and reduced theft . sales.
In addition, greater productive efficiency and savings in energy use
have followed substantial investment in reverse osmosis (RO) plants.
While recent dry weather caused serious problems in Sicily, Maltas
large investment in the RO plants sheltered us from similar water scarcity.
Now our focus shifts from the security of supply to the quality of water.
A major WSC objective is reduced nitrate levels in potable water. Soon,
this will be achieved by blending groundwater with water from the RO
In Gozo, nitrate levels will be cut through a water polishing plant
that will treat groundwater.
Infrastructural spending will always be a priority of Nationalist governments.
The most recent parliamentary debate on the WSC estimates shows where
Labour stands. It was evident that the Labour Party still believes that
the investment in the RO plants was a waste of money.
This is a good indication of what would be in store for the infrastructure
under a future Labour government. Infrastructure is not a favourite
of Labours planners. The past and the present are the best indicators
of what is in store for the future.
The policy behind our initiatives at public enterprises has three themes.
One is to improve efficiency. Another is to provide better service to
customers. There is also the commitment to reduce any negative impact
on the environment.
These principles will continue to guide our future.