Issue link: https://maltatoday.uberflip.com/i/665749
maltatoday, WEDNESDAY, 13 APRIL 2016 13 A public discussion on linking Malta and Gozo by will be held this Saturday 16 April at a hotel in Mgarr, Gozo where leaders of the two main political parties are ex- pected to address the audience. Talk on building a seabed tunnel has remerged of late even though political leaders have for a long time been promising such an ambitious task claiming advantages to commuters who need to work in Malta. Gozitan MPs Franco Mercieca and Chris Said both declared that the tunnel project was included in the electoral programmes of both the political parties so one can safely say that the Maltese voters voted for this project, yet skeptics say the promise has been a thirst quencher to attract votes for too long. Readers may recall how five years ago, Austin Gatt, the former PN minister responsible for public works, had launched a formal task force to study the cost and benefits of a permanent link to Gozo. 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 saying that given that as no significant impacts on the environment were foreseen, the proposal did not require an environmental impact assessment. Emboldened by this, 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 to study the ambitious project of building a permanent link. Business developers now agree it may be more practical to dig a seabed tunnel than a bridge. Others find it doable since over four million people commute on an annual basis to Gozo using the ferry service. No detailed information has as yet been released to the public since a feasibility study was concluded by economist Gordon Cordina but the cost of digging underground for a tunnel was expected to cost between €156 million and €500 million (obviously this will generate a lot of construction jobs). The study was undertaken by specialists Mott Macdonald appointed by Transport Malta. It proposed four potential links: three beneath the seabed and passing under Comino and another, an immersed tube tunnel, lying on it. The study revealed that barring mishaps it will take a period of seven years to complete. 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 priced similar to the ones charged by Gozo Channel (currently subsidised) the tunnel will be leaving a modest commercial surplus. This may attract private investment and one is not given any prize for guessing the chances are high that a consortium of local property magnates will surface to tender for an exclusive 20/50 year franchise. Pragmatists argue that prestigious projects can wait when considering that part of our road infrastructure is in a third world country state of repair and our health and pensions sector deficit calls for a more frugal approach to posterity projects. Seeing it from the eyes of daily commuters who travel daily on ferry the solution of a faster link will be godsend. Obviously given the hostile bickering that is consuming the party in power and the opposition - who are constantly disagreeing on every thing under the sun one finds it impossible for any new venture to be started as this will be opposed by the negative sentiment which is prevalent in Parliamentary debates. Surely a tunnel is a long term investment in the road infrastructure which reflects a permanent improvement and if well managed can help to ameliorate the double insularity of the sister island. But the heated political discussion about the Panama Papers has stolen the limelight of public opinion where the leader of the opposition is urging the faithful to support his plea for the incumbent prime minister to resign. A vote of no confidence is planned to be tabled in Parliament to this effect next week. Under this tense political atmosphere there is no doubt that large scale projects are placed on the back burner until there is a semblance of stability in politics. The Panama Papers found no smoking gun, no millions slashed away yet the inference that a senior minister last year engaged his preferred consultant Nexia BT to procure a New Zealand trust for his family which in turn holds shares in a Panama shell company has regaled the opposition with enough gun powder to blow up Castille. The rhetoric displayed over the TV screens, with two mass rallies protesting over the alleged corruption (they plead no smoke without a fire) major theatrics and rivers of crocodile tears flowing and various lamentations uttered by the opposition has muddled the waters. It is not a storm in a teacup and unless the political fray calms down there may be delays in crucial investment decisions and also leave an indelible mark on the fledging financial services sector. Brussels may find tiny Malta weak with its internal party divisions - easy gun fodder to be used to ram home undesirable financial transaction taxes and imbibe sour medicine - tax harmonization. Back to the tunnel debate and one hopes that sense will prevail and the public meeting planned for Saturday will bring in some consensus among political leaders and the commercial community. The latter is chasing government to start the geological studies needed to evaluate the technical aspects of the seabed. Gozo business community lament that the type of tourists that visit are day trippers who cannot sustain the critical mass necessary to sustain a thriving hospitality industry. This means that hotels and restaurants in Gozo cannot achieve the level of sustainability and high class status as investors in hospitality sector have enjoyed in Malta. Naturally even though most communal services such as police, health and education are present in both islands unless commuting to Malta is improved on a 24/7 basis Gozo inhabitants will remain cocooned during storms and inclement weather. They say comparisons can be odious but one feels encouraged to quote the convenience (and affluence) enjoyed by residents of Gibraltar which is by far smaller but which its dwellers enjoy better access to mainland 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, travelers crossing from neighbouring Spain, others by cruise liners, and by air from Europe. Can we forfeit this dream of future prosperity? Sadly, Panama Papers fever is in the air and opposition is busy trying to win brownie points with the electorate so perhaps the connections project may die a natural death. Stoically pro-tunnel adherents insist that if the government will not take the plunge then enough interest can be found in the private sector to run the tunnel link which one day will see the mystical Calypso nymph attracting wealthy visitors to its enchanted isle. Only then we can start to count our blessings... gmm@pkfmalta.com George Mangion is a senior partner of an audit and consultancy firm, and has over twenty five experience in accounting, taxation, financial and consultancy services. His efforts have seen that PKF has been instrumental in establishing many companies in Malta and placed PKF in the forefront as professional financial service providers on the Island.. George can be contacted at gmm@pkfmalta.com or on +356 21493041 Business Today Calypso nymph inspires us to unite the islands George M. Mangion