02 APRIL 2003

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On the referendum and parastatal corporations

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 Sant’s 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 party’s defeat in the referendum was a flashback to the Labour administrations of the dark Eighties.
It seems that Dr Sant’s 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 Sant’s 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 entity’s heavy financial burden on the economy. Another indicator of the integrity of the plan is the EU’s 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 Labour’s Party’s 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 shipyard’s 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 better use.
The new boats replace the old and tired ferries that were inappropriate for today’s 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 Malta’s 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 Malta’s tourist package.
What are Labour’s concrete proposals for Gozo Channel and Air Malta? As regards Air Malta, Labour’s only ambition is to switch responsibility for this entity to a different Ministry. As regards Gozo Channel, Labour has an unhappy track record. Labour’s 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!
Utility rates
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, Labour’s 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 Labour’s rates were 47 per cent higher.
We are waiting for Dr Sant’s 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 electricity supply.
Enemalta’s 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 phased out.
Reduced water tariffs were made possible because we were committed to decrease wastage in the Water Services Corporation. The government’s 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, Malta’s 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 plants.
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 Labour’s 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.

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
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