Almost there... but not quite

Alfred Sant (June 8) almost understands the government's intentions on Sea Malta; almost understands the government's intentions for a guaranteed maritime link between Malta and the mainland; almost understands the government's unwillingness to use public money to subsidise a firm competing with private industry; almost, but, typically, not quite.

What Dr Sant remains thankfully inimitable at is the practice of the single-devotee-religion, repeating his own creed until such time he imagines it to be true. Yet, even in this umpteenth crusade, Dr Sant deserves to be replied to not because his allegations have any merit in and of themselves but rather because he seems to think they do.

There is no controversy about premises from which both sides of this argument depart:

One: Maltese exporters require a guaranteed frequency of maritime connection between Malta and mainland Europe. That guarantee cannot lapse because a shipping line needs to maintain its vessel in dry dock or because the line decides to miss a trip because it has been under-booked. The uninterruptable guarantee cannot push up the price of the routine trips, irrespective of cost, if the insularity of manufacturing on these islands is not to be perennially uncompetitive on geographical grounds.

Two: For similar reasons, Maltese importers require a level of comfort of prices that are not inflated to cover necessary guarantees of service. Inflated prices are ultimately carried by the local consumer who is asked to pay extra for the simple fact of living on an island.

Three: If at all possible, jobs should be saved, including Sea Malta employees' jobs. If Sea Malta is a loss-making organisation - and by any definition except Dr Sant's, it is, very much so - that fact should, if possible, be turned around and its employees' jobs should be made genuinely gainful and productive.

In understanding these points, Dr Sant almost starts to make sense. Almost, but not quite. His conclusions are typical and as such wrong.

Firstly, the maritime link between Malta and Europe is strategic. Sea Malta is a provider of that service but that does not make it strategic in and of itself. Since 1990, Sea Malta has operated in a liberalised context and it has therefore not been alone in providing a maritime link between Malta and mainland Europe.

Sea Malta is not endowed with any exclusive strategic quality over and above privately provided services. Exporters and importers require a service. They need that service to be efficient, reliable, consistent and competitively priced. Whether the provider is state-owned or not is not relevant in the least.

Secondly, the public service obligation contract currently in force with Sea Malta (that would be inherited by any new owner of the organisation) is a subsidy allowed by law because it is limited to paying for the difference between a commercial operation and a guarantee of frequency and price that may not be commercially viable but is strategically essential.

Dr Sant's identification of "the problem with such an approach is that it leaves the country totally exposed were the public service agreement to collapse for some reason" is lame at best. Should the public service obligation contract with Sea Malta collapse "for some reason" there are several other operators of the maritime link to whom the annual subsidy can be granted. Dr Sant is typically Socialist in his lack of appreciation that it does not have to be state-owned to exist.

Thirdly, Dr Sant's blindly self-confident optimism about Sea Malta's finances is heart-breaking coming as it does from someone whose middle name was hofra (hole) and whose declared profession is "management consultant".

In 1998/99, Sea Malta underwent pre-tax losses of Lm1.03 million; followed by pre-tax losses of Lm480,000 in 1999/2000; Lm343,378 in 2000/01; a pathetic profit of Lm161,000 in 2001/02 almost completely due to non-shipping business and again losses of Lm501,000 in 2002/03; losses of Lm1.06 million in 2003/04 and losses of Lm549,000 in 2004/05. It takes a very acute sense of nostalgia for Socialist relics to consider these "cuts in losses" as "the basis for a long term improvement in Sea Malta's operations".

Fourthly, Dr Sant's comparison of Sea Malta with Gozo Channel is an involuntary reflection of his resentment of Gozitans.

The public service obligation contract with Gozo Channel Co. Ltd covers the gap in every single ticket that every Gozitan (and every senior citizen) purchases to board the inter-island ferry. The discount granted by the line to Gozitans and senior citizens is a gap between what should be a commercial price and what is a subsidised price that recognises the specific double-insularity of residents of Gozo. That financial gap is considerably larger than the gap that the PSO with Sea Malta covers; and that is the price to guarantee a regularity of what should otherwise be a commercial service - and it is for Sea Malta's private competitors - without having to increase consumer prices.

Comparing Sea Malta with Gozo Channel is not simply a matter of not comparing like with like but more of an involuntary expression of what to Dr Sant is a matter of secret policy: Gozitans do not deserve public funding for their transportation needs and the money spent in subsidising their daily trips should be spent elsewhere.

Fifthly, Dr Sant argues that the government should have subsidised the cost of a new ship to replace the written-off MV Zebbug serving the Reggio/Catania route. Ironically, the Reggio/Catania route will always be worse off financially if a new vessel is purchased because the company will have to account for its depreciation. Any first-year accountancy student would understand the reasons why.

What Dr Sant conveniently forgets to state is that when the government did invest in the company and guaranteed the purchase of the MV Maltese Falcon in 1999 for Lm2.7 million, Sea Malta still needs to pay Lm1.525 million of that loan and the guarantee will call the government (as general guarantor of the company) in case the company does not fulfil its obligations.

These are matters of disagreement. They are different policy options that distinguish the government from Dr Sant.

There is another Sant distinguishing factor. He thinks his job as Opposition Leader (the function of which he should be an expert on by now) is to sabotage the nation's effort to nurture the growth of its own prosperity. In coming out with the information he had access to at what he knew was the time the government was concluding privatisation negotiations, he has proven consistent in his method of harming the national interest at the service of what he perceives to be his own.

Dr Sant proves again to be the proverbial runner-up of Maltese politics: proxime accessit - almost there - but not quite.

Dr Gatt is Minister for Investment, Industry and Information Technology.