Issue link: https://maltatoday.uberflip.com/i/1076517
maltatoday | WEDNESDAY • 30 JANUARY 2019 13 OPINION www.creditinfo.com.mt info@creditinfo.com.mt Tel: 2131 2344 Your Local Partner for Credit Risk Management Solutions Supporting you all the way George M. Mangion gmm@pkfmalta.com The writer is a partner in PKF, an audit and business advisory firm IN 2016, Malta Transport com- missioned Dr Marvin Formosa to carry out a Social Impact As- sessment on the possibility that a permanent tunnel link is con- structed between the island of Gozo and mainland Malta. The study is very well prepared and largely concludes that a tunnel will not only reduce the travel- ling time, but will also provide commuters with more control when travelling between the is- lands. The current ferry service is now operating three vessels which are regularly maintained but due to old age and inten- sive use, they will soon need to be replaced. The ferry service is comfortable and works regu- larly with some exception dur- ing stormy weather when there are no alternative means of transport. The daily number of students and workers who cross regularly amount on average to a thousand. Of course, apart from such a cohort (these can be classified as social cases) there are thou- sands who use the ferry such as day trippers, suppliers and visi- tors who seek the tranquil en- vironment away from the mad- dening crowd on the mainland. The Social Impact Assessment, speaks of the double insularity and consequent peripheral geo- graphical status, which includes a brain drain, a demographic drain, an economic drain, and wellbeing drain. Indeed, as early as March 1972, the Maltese government commissioned the Overseas Technical Cooperation Agency of the Government of Japan to carry out a preliminary survey report on a possible permanent link between the two islands (McDonald, 2012). One is not surprised that various administrations since the 1970s have been whetting the appetite of their constitu- ents with the dream of finding enough capital to finance such an ambitious project. The government now timed its decision to go for a subsea tun- nel tender ahead of this year's elections for the local councils and MEP candidates. So far, the most likely route will be starting from Manikata ending somewhere in Nadur Gozo – a stretch of thirteen kilometres having one lane with a 70-metre radius. The tunnel project was entrusted to Norwegian experts SINTEF that have many years of experience. So far, not to upset public opinion, the administration is promising that users of the tunnel will be paying a toll similar to the amount currently charged by the Gozo Channel ferry. This project is quite a behemoth as one can imagine the millions of tons of debris (mostly lower globigerina lime- stone) which have to be dis- posed elsewhere. Such a large amount of debris cannot be dispersed on the sea- bed, as it will ruin our bathing water for a long period so ideally the boring of the rock face can be timed to coincide with the birth of other projects linked to approved land reclama- tion schemes. There have been many suggestions on the best site for land reclamation which was a popular topic during the 2013 election but since then it seems to have petered out. One location, which has been studied and considered feasible by MEPA is the Qalet Marku area where the sea is relatively shallow but due to environmen- tal damage to seagrass, the site cannot be used. It appears that government has opted to allow mega developers to have free access to the seashore to be used for land reclamation in cases where public land has been con- ceded on preferential terms for touristic and residential pur- poses (vide proposed Corinthia public land concession at St George's point). Excluding any hiccups, the tunnel will take around seven years to complete, boasting a daily traffic capacity of 6,500 ve- hicles. The social impact assess- ment reveals that over 80% of Gozitans are in favour yet there are major concerns about the environmental impact resulting from an increase in motor traf- fic which would push for wider roads to be built in Gozo. The study shows that the tun- nel link would result in positive economic impacts by contrib- uting to (i) a better income and standard of living for Gozitans, and thus, aiding to reverse the higher rates of living at-risk of poverty in Gozo when com- pared to Malta, (ii) an enhanced local economy, (iii) increases in employment opportunities (iv) improvements in investment, and road infrastructure spend- ing, (v) higher tax revenues, (vi) superior public utilities infra- structure, (vii) a second fibre optic cable, (viii) more direct, indirect, and induced spending in Gozo, and (ix) property pric- es will match those of Malta. Naturally, the question of the high capital cost for a small community may pose the ques- tion why past administrations promised the link but never found the money. In fact, the economy was for 25 years regis- tering annual deficits averaging €200/€300 million and national debt servicing was not cheap. Pragmatists may argue that spending this kind of money cannot be justified on economic terms/benefits accruing for a small Gozo community. They prefer to commission a comprehensive fast ferry system together with an efficient heli- copter service as these will be cheaper to run. Optimists disa- gree, saying that once the econ- omy is on the mend and is reg- istering a national surplus close to €400 million, it will make the concept of a tunnel affordable. Seeing it from the eyes of about a thousand daily commuters who travel to Malta for work or study – the solution of a perma- nent link will be a godsend. Surely a tunnel is a long-term investment in the road infra- structure which reflects a per- manent improvement and if well managed can help to re- duce the double insularity of the sister island. Another con- cern is that Gozo's population is ageing faster than that of the mainland. Studies show that it is relatively skewed in favour of older persons, as the largest number of residents was found in the study to be in the 50-59 and 60-69 age brackets and this is likely to exacerbate as the birth-rate in Gozo is lower than that of Malta. Again, the level of affluence of households shows a disparity in disposable income. Households in the island of the three hills were found to be €2,000 poorer than in the mainland (in 2013). The improved connectivity will reduce the disparity. The Gozo Business Chamber laments that the type of tourists that visit Gozo are day trippers who can- not sustain the critical mass to support a thriving hospitality industry. Even though most community services such as police, health and education are present in both islands yet during inclem- ent weather Gozo inhabitants remain cocooned. The media was speculating that the cost of excavating the tunnel and lay- ing the road infrastructure is expected to reach between €156 million and €500 million (many fear this puts more pressure to import foreign labour). Finally, the Minister of Trans- port, late last year announced that within six months an inter- national call for tenders would be issued relative to the Malta- Gozo undersea tunnel. It seems the die is cast – shall we start excavating? George Mangion Gozo – who pays for the tunnel?