Tails and tales in the Gozo story

No, not the old one about the sister island's meagre contribution to the tax-take. That is an ongoing mystery which only the Finance Ministry can unravel. The current story was covered, not in complete detail, in the last debate in the House of Representatives before it adjourned to restore its spirits and gear up for another exciting year.

The modern Chambray story began 11 years ago. The deal concocted at the time did not work out. Austin Gatt, the Investments Minister, granted that at the start of the two-day debate on a motion to grant Fort Chambray to companies owned by the Caruana family of Gozo. Former Finance Minister John Dalli said the project had been "poisoned" by the Labour Opposition. No one on the government's side wondered at all whether the deal had been less than perfect from its conception.

As Neil Diamond sings, that was yesterday. The motion was about lately and tomorrow. Lately the "another" deal was struck whereby the shares in the project will be held by the Caruanas. That includes both the private shares, some of which changed hands many times over the years, and the quarter held by the state, on which the government claims to be making 100 per cent profit, since it had acquired them "for free".

Such a claim betrays a unique perception of "profit". The government had granted the people's property to the promoters and the shares were supposed to be issued to it in compensation. The only person to get anything for free out it all is a certain Memmo. He now pockets a few cool millions though he contributed only problems - a high price to let Malta rid itself of the connection with him. The opposition found its voice over the final twist in the tale. Opposition Leader Alfred Sant undertook to lay a stone outside the site amid a small-scale demo to manifest his disgust. But - in contrast to the deal whereby 70 per cent of Mid-Med Bank was transferred to the HSBC Group, also at a much criticised price - the opposition did not suggest it would revisit the issue once back in office.

The Opposition Leader too, in fact, was at pains not to cast any reflection on the Caruanas for acquiring the people's share and getting a fresh emphytheutical grant at a throwaway price. Like Minister for Gozo Giovanna Debono and Minister Gatt he was fulsome in his praise for the Caruanas' contribution to Gozo. Minister Gatt saw an anomaly there and tried to project Dr Sant's criticism of the deal as a labelling of the Caruana family as speculators - a charge strongly resisted.

Gozo's mysteries are indeed deep. Even what seems simple is shrouded in them. To my mind, the unhappy past aside, there were two basic financial points to address. One, the terms of the new emphytheutical grant. The opposition attacked the terms. Dr Sant likened them to allocating housing to the rich at the price of social housing. That was somewhat off beam - the benefit will lie in the profit the developers can make on a low acquisition price not in the price to be paid by those who buy apartments in Chambray.

Minister Gatt defended the terms. He claimed that the government was getting a "high" premium so, according to commercial practice, it could afford to get low rent.

The other point was, and remains, why the government concluded the deal over the people's shares the way it did with the Caruanas. Their standing is not the issue. By all accounts, they enjoy a high reputation. That does not make them automatically eligible for an exclusive approach.

The opposition did not come out in strong enough voice over that approach. Minister Gatt had attempted to deal with it in the controversy created in the media weeks before the motion was debated. He held that the other shareholders would only conclude with the Caruanas, so the government had no option but to do likewise.

If that was the case the shareholder-tail has wagged the government-dog despite the state being both a shareholder as well as the owner of the site, not to mention the little matter of the powers of the House of Representatives.

At a minimum the government should have insisted that it would sell its shares after an open call for expressions of interest. The Caruanas would have been free to respond. They would probably have been successful, too, in view of their arrangement over the other shares. But the price of acquisition would have been market related not according to any professional valuation as if what was at stake was a split-up of an inheritance.

That, surely, should be an underlying consideration regarding state assets to be privatised by the government of the day.