Issue link: https://maltatoday.uberflip.com/i/252940
maltatoday, SUNDAY, 2 FEBRUARY 2014
4
News
JURGEN BALZAN
AND MATTHEW VELLA
MALTA'S local warden system is
in the process of being reformed, 14
years after it was first introduced – but
the jury is out on what government's
plans for a centralised unit means
for people like Kenneth De Martino,
whose Guard & Warden Service runs
the gamut of local enforcement serv-
ices, deploying wardens to the coun-
cils, monitoring CCTV systems and
also processing speed camera fines.
De Martino is set to meet former
Kalkara mayor Michael Cohen, the
government's consultant on the new
centralised unit for local enforce-
ment next week to see how Parlia-
mentary Secretary for Local Councils
José Herrera intends to change the
current privatised system.
The hints of nationalisation are in
the air: yesterday the parliamentary
secretary for local councils said a
"fairer and more transparent" sys-
tem would reduce costs by 20% and
become more efficient in collecting
some €18 million in unpaid fines.
The key change is granting the cur-
rent management committee that
runs the local enforcement system,
the power to create a centralised unit
to enforce the laws delegated to the
five regional committees.
But this means effectively taking on
the administration of local wardens,
from the private companies currently
providing the manpower for the local
councils.
"The management committee
should have the necessary human
and financial resources to have a fully
functioning enforcement system,"
Herrera said, adding that the new
unit would function independently.
During yesterday's presentation,
Herrera said private firms today
reaped 74% of the value of local fines
being dished out.
And he clearly gave the impression
that "no warden will lose his job", sug-
gesting that the new unit will employ
them and provide their training.
Kenneth De Martino yesterday
sounded diplomatic when he told
MaltaToday that he is looking for-
ward to contribute to a public-pri-
vate partnership. "I hope to be able to
discuss and participate in the devel-
opment of the enforcement system.
Quite a lot of knowledge and experi-
ence has been gained over the years
and I am sure I will be able to con-
tribute to the further development of
the system. A PPP would be possible.
I look forward to some very interest-
ing discussions."
But after years running Malta's lo-
cal warden system – a multi-million
business of fines dispensed by war-
dens, CCTV and speed cameras
– people like De Martino must be
watching the government's next
move with some trepidation.
In 2011, Joseph Muscat declared
he would stand up to the "subsidised
racket" in the local enforcement sys-
tem, claiming that "the bulk of the
cash received by councils is going...
to two companies" and ominously
sounded a stark warning: "the days
of big fish taking up everything are
over."
According to an OPM report seen
by MaltaToday, between 2003 and
2008 wardens and speed cameras
issued a total of 1.6 million tickets
at a value of €56 million. The actual
number of tickets paid was much low-
er, with 'only' €39 million received by
local councils – leaving well over 25%
of unpaid tickets in bad debts.
The system is costly to run. Of the
€23 million, €19 million was the cost
of wardens and IT services for the
running of the speed cameras by Da-
tatrak. 53% went to Guard & Warden
and Sterling Security (another firm,
Aurelia, also provided wardens for
two regional councils) and 31% went
to Datatrak (now Loqus). The rest
went to other direct costs.
Private companies have in the past
defended themselves from Muscat's
talk of "big fish" – De Martino had
told MaltaToday that he has high
labour costs due to the employment
of the wardens and the provision of
their handheld computers. As an
example, in 2009 Guard & Warden
made €2.5 million in revenues but its
cost of sales was €2.1 million, leaving
it with a gross profit of €400,000 be-
fore tax and other costs.
'A vicious circle'
There is an important flipside how-
ever. Herrera's White Paper yester-
day said that local councils were not
getting much cash from the local en-
forcement system, because they had
to pay the private firms running it for
them. And that means that the sys-
tem can only survive if wardens issue
more tickets.
Indeed, even De Martino had told
this newspaper that speed cameras
were making any cash "because mo-
torists have got used to the system.
Which is why people are mistaken if
they think we are making profits over
and above the norm."
"The system has entered a vicious
circle, and it depends on more traffic
fines being issued, otherwise the sys-
tem crumbles," the White Paper says.
"The system should reflect people's
aspirations… it needs a serious cost-
cutting exercise."
Yesterday, Michael Cohen – who is
well aware of how the system works,
with its local councils grouped in re-
gional committees that subcontract
local enforcement to the private sec-
tor – accused it of being "expensive
and inefficient".
Cohen – who was the subject of
an OLAF investigation and together
with other former councillors faces
court proceedings on the misappro-
priation of EU funds claimed on air
tickets – said that since 2013, local
councils failed to collect up to €18.5
million in unpaid citations.
The unit is to be led by a chief ex-
ecutive "with vast experience in the
enforcement sector" who will be re-
sponsible from coordinating the unit
which will administer the local war-
dens system.
"If we take careful decisions we can
obtain better financial results. There-
fore the reform should give local en-
forcement a new direction, leading to
a reduction in costs," Herrera said.
He explained that the reform could
save the government up to €1.2 mil-
lion a year, which in turn could be
invested in training local wardens
and strengthen environmental pro-
tection.
A number of public consultation
meetings will be held in the coming
weeks. The process will come to an
end on 18 April.
How does the local enforcement
system (LES) work?
There is no doubt that the devolu-
tion of police duties to the local en-
forcement system in 1999 developed
into a money-generating mechanism
for local councils.
In its introduction, the White Pa-
per launched by José Herrera says
that local councils "were given the
misleading impression they could
be strengthening their finances" and
that the discrepancy between the
amount of money actually collected
led to infighting over councils who
made more money.
Councils geographically located on
busy thoroughfares, like Sliema and
St Julian's, stood to make even greater
revenues through the speed cameras
located on Regional Road.
But in the past, people like former
Siggiewi mayor Robert Musumeci
refused to turn his locality in a cash-
cow for the LES, only deploying a few
wardens on a few days on the main
road outside the village core.
In 2002, 44 councils – 30 in Malta
and 14 in Gozo – created a pooling
system and in 2011 this developed
into the regional system: regionally
grouped committees which took the
collective decision to employ author-
ised officers and contract out private
companies to deploy local wardens
and process speed camera and CCTV
fines, and to run their local tribunals.
According to the White Paper,
despite the €50 million in collected
fines, little of this cash ended up in
the councils' budgets after the costs
of the system were taken into ac-
count.
The White Paper says the LES is
a vicious circle: if councils want to
make more money, they have to pay
the private companies to dish out the
fines… and that means more fines.
If they are not making enough cash
now, the system will crumble unless
more fines are issued.
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