Issue link: https://maltatoday.uberflip.com/i/423164
maltatoday, WEDNESDAY, 26 NOVEMBER 2014 12 Business Today A lot of emotions have been stirred of late concerning the controver- sial study to build a bridge linking the islands. The media reported in bold type last weekend that the project will reach one billion euro in cost and needs a four million euro daily maintenance subsidy. A bridge between Malta and Gozo is a non-starter for environmentalists, who were unanimous in shooting down the proposal. Some argue that the PN administration on their watch accumulated a €6 billion national debt mostly to pay wages and recurrent expenditure, so why not risk another billion to make the elusive Calypso nymph's dream come true? According to the study, commissioned by the government from the China Communications Construction Company, a bridge between Malta and Gozo would take four years to complete. Definitely there is a strong bias in the media against the project. Bloggers already feel xenophobic about a massive investment from China (if any) that will lead the tiny islands to the old path of economic colonisation. One such blogger (a scholar and active lawyer from Gozo) solemnly replied that Gozo never asked for such a gift. While writing this piece I am puzzled to reflect how fickle the public perception is of our political leaders. Memories die quickly and few will recall political blunders of the past administrations while they feast their anger over peccadilloes of the present administration. Austin Gatt, the minister responsible for the Arriva debacle was the same one responsible for launching the Gozo study for a tunnel. Then he was quoted by the media as saying the proposed tunnel was "environmentally viable, structurally doable and made economic sense, the government would commit to building it". Not surprisingly it received the blessing of Mepa, which was reported in the media as saying that given that no significant impacts on the environment were foreseen, the proposal did not require an environmental impact assessment. Three years ago the previous administration announced that a preliminary report concluded it is "doable" and opened the doors to the next step to engage consultants for the start of a full feasibility report. But we hope our leaders have learned their lessons and the next ambitious project of building a bridge will meet a sober ending. Business developers argue this bridge is to be encouraged since such an important engineering feat will vastly improve our road infrastructure and mitigate the insularity of all sorts suffered by our brethren on the sister island. Many Gozitans who have to commute daily agree the effect of the bridge on them would be beneficial. No detailed information has as yet been released to the public but the cost today of a bridge was in the region of €1 billion. Already hell has broken loose as environmentalists branded it as a non-starter. The alternative is digging underground for a tunnel which three years ago was expected to cost between €156 million and €500 million (obviously it can generate much needed construction jobs). The study was undertaken by specialists Mott Macdonald, appointed by Transport Malta. It proposed four potential links: three bored beneath the seabed and passing under Comino and another, an immersed tube tunnel, lying on it. The study revealed that barring mishaps it would take seven years to complete. An option has been approved by the Cabinet to include an upgraded ferry service and other combinations, as well as methods of financing. It may potentially qualify for external funding, apart from any EU funding under the Ten-T network scheme under the Cohesion Funds protocol. The plan by Transport Malta hopes that technical expertise is to be provided through the Joint Assistance to Support Projects in European Regions, Jaspers, which helped in the preparation of major projects submitted for grant financing under the Structural and Cohesion Funds. The good thing is that once the toll charges are similar to the ones charged by Gozo Channel (currently subsidised) the tunnel or less so a bridge will be leaving a modest commercial surplus. This may attract private investment and one is not given any prize for guessing the chances that a private consortium of local property magnates will surface to tender for an exclusive 20/50 year franchise. So the question arises can Malta afford to add more debt to fulfill a lifelong promise to Gozitans to improve their standard of living? Can the China investor be given rights for future offshore oil exploration in part compensation for the massive investment to erect the majestic bridge? Pragmatists argue that prestigious projects can wait when our road infrastructure is in a third world country state of repair and our health sector deficit calls for building more hospitals. Back to the bridge saga and one can continue to justify the link until the cows come home. The undeniable truth is that whichever type of permanent connection is chosen this helps to ameliorate the double insularity of the sister island. But does the discussion about the investment warrant a plebiscite? Now with the budget debate at its pinnacle the opposition is trying to rip it open to criticise its proposals. We are regaled with rhetoric over the TV screens, theatrics and rivers of crocodile tears flowing and various lamentations uttered by politicians of different abilities bestowing their heartfelt advice to citizens to belittle the government attempts to navigate the economy to a higher performance. But miracles take time and with an inherited debt mountain of €6 billion not much can be done when we have already sold our family silver to foreigners – sometimes at questionable fire sale prices. At the moment the type of tourist that visits is a day tripper who cannot sustain the critical mass necessary to sustain a thriving hospitality industry. This means that unless commuting to Gozo is improved on a 24/7 basis its inhabitants will remain cocooned during storms and inclement weather and will never attain the levels of economic development achieved in Malta. Even though the number of travellers to Gozo increased, reaching some four million passenger movements between both islands, this may not justify the heavy investment. For example one can cite as an example the convenience enjoyed by residents of Gibraltar who are by far fewer but whose dwellers enjoy better access and thus improved business opportunities leading to a high per capita income. This was achieved due to its improved connections, which apart from other factors has contributed to a buoyant financial services industry. In Gibraltar one finds a fully fledged airport with a runway jutting on a reclaimed part into the sea. The tourist industry is galloping at full speed, travellers crossing from neighbouring Spain, others by cruise liners, and by air from Europe. Perhaps one may exclaim that comparisons with Gozo are odious, but really and truly it helps galvanising in our mindset a changed attitude to give Gozo its due attention and help it attain a more prosperous future. In an island of approximately 30,000 inhabitants they deserve to reach a higher GDP and better standards of living. It is true that the islanders are smart and try to be proactive in business opportunities but the general infrastructure for mega business does not exist. So is the current hype about building a permanent connection a ruse, or perhaps a pipe-dream by savvy politicians? The answer can be found by reading Roamer (an ex-anonymous writer/s in The Sunday Times of Malta). In a header styled "linking Gozo – hope not", the ghost writer is against the project, saying inter alia that the exclusive charm of Gozo has to do with getting there by boat or sea-plane and this will be forfeited by tunneling underground. In Roamer's words perhaps only underwater rats are ordained to burrow underground and enjoy the experience, but not Gozitans! Such an underground trip misses out on the aesthetics provided by the profile of an island that has charmed travellers, both local and foreign (remember the Calypso nymph legend), since time immemorial. Can we again forfeit this dream of future prosperity? Budget fever is in the air and both parties are busy trying to win brownie points with the electorate so perhaps the connections project, which was not part of the proposals by the minister for Gozo, may die a natural death. Finally pro-tunnel/bridge adherents reply that rewards in faster business growth will result and remind us of the wise adage – nothing ventured nothing gained. It is a first important step taken on a long journey... which will one day see the Calypso nymph attracting wealthy investors to its enchanted isle. Only then can we start to count our blessings… George M. Mangion is a partner in PKF, an audit and business advisory firm George Mangion Calypso dreams how to unite the islands