Who pays? Who gains?

What's the point of having an Opposition if it makes the same mistakes as the Government? The recently revealed policy stand of the MLP on the proposed golf course criticises the Government's proposal superficially; but it does not tackle the main issue, namely, that a new golf course - at Ix-Xaghra l-Hamra, Ta' Cenc or wherever - would make too heavy demands on some of our scarcest resources - land, water and energy.

The MLP and others, while criticising the social and environmental implications of a golf course, seem to have accepted the Government's assumption that a golf course would be of economic benefit to Malta.

However, the main problem is that one golf course does not make economic sense and three (or "a few") golf courses would be an unbearable burden on our island. We already have a golf course at Marsa. It probably needs to be upgraded. But anything more than that would be grossly uneconomic for Malta as a whole, though it might be profitable for some individuals.

Water, land, oil

Let's start with the obvious. A golf course guzzles huge amounts of water. The bigger it is, the more water it swallows. One can calculate that it would need about 500,000 m3 of water a year,1 that is, about one and a half times the production of non-potable water in Malta.2 Water is currently charged at about Lm1.25 per m3. But its true cost is higher because of subsidies; the WSC continues to receive an annual subsidy of about Lm8 million from Government.3 Most of our water is produced by desalination plants which run on oil and the price of oil is high and rising; hence Enemalta's financial deficit.

Nobody can predict the price of oil in five or ten years' time, but it would be foolish not to allow for the possibility of heavy price increases in calculating a project's profitability. On present showing, it seems more than likely that in future the owners of a possible golf course would have to pressure or blackmail the government for ever-increasing subsidies, or further concessions which would be undesirable on environmental and social grounds (see below). In other words, a golf course would become a green elephant. A few golf courses would mean a few green elephants.

Another obvious thing is land. Malta is the most densely populated country in Europe and one of the most densely populated in the world. About 1,300 of us are crowded on every square kilometre. Comparisons with other countries must be made with great caution.

Cyprus has a surface area 30 times that of Malta; Tunisia's is more than 500 times ours. A golf course would take up an area which could accommodate 70 football pitches; three golf courses, three times as many. Over 99 per cent of the population would be excluded from that area, which would be the preserve of rich tourists and rich Maltese. Is that the best way to promote social harmony, let alone socialist equality? Would we not be going back to the bad old days when Malta was a British base and several plum sites were fenced off and out of bounds for the Maltese?

Can all this be justified by the argument that a golf course would bring 30,000 rich tourists a year? The problem here is that nobody has explained rationally how this figure was arrived at. Indeed, some critical calculations indicate that it is all pie in the sky.

For instance, Ireland is blessed with abundant rainwater and much more space than us. It has hundreds of golf courses and is the sixth golf tourism destination in the world, the first being the United States. In 2001, Ireland attracted about 110,000 golf tourists from the United Kingdom - its largest market and probably Malta's, too - but 75 per cent of them travelled by sea.4 And let us not forget that rich golfers travel to a country where they expect to find several golf courses.

It is difficult to see Malta replicating Ireland's performance with one to three golf courses and higher travel costs. When push comes to shove and fiction turns to reality, we may find that the 30,000 rich tourists add up to only a few dozen or a few hundred at best. In any case, the market studies being conducted by MEPA should give detailed and well-reasoned calculations for the expected number of "rich golf tourists" and not simply indulge politicians' penchant for happy-go-lucky optimism.

Who gains?

So what benefits do our leaders in Government and Opposition expect from a golf course, or maybe a few of them? And who will pocket them? While we await with bated breath the publication of MEPA's serious calculations, we can look at the basics. Golf courses (including those owned by municipalities) are usually operated for profit. In Europe and the US most of them draw about 40 per cent of their revenues from membership or initiation fees, with an average of less than 30 per cent from playing fees. The balance is covered by sales and other fees.

In the case of a self-standing golf course in Malta, membership fees would probably be limited; after all, you cannot charge even a rich tourist an annual membership fee for a stay of a few days or weeks. So playing fees would have to rise considerably to break even and this would adversely affect the golf course's competitiveness.

How about costs? Water at the current price of Lm1.25 per m3 indicates that each one of the 30,000 rich golfers would have to be charged Lm21 just to cover the water charges. If the cost of water doubles, because of rising energy costs, and only 10,000 of the 30,000 imagined tourists turn up, they would each have to pay some Lm126 to cover water charges. And you have not yet factored in capital costs, financial charges and taxes, maintenance and administrative costs (including wages), and so on.

This explains why golf courses are often viable only in the context of larger real estate development projects. That is the only way to cover part of development costs and pass on some of the burden of annual upkeep to residents. This aspect was taken into account by the now defunct Verdala project, but has been downplayed by the Government and ignored by the Opposition.

The undeclared object of the project may well be a real estate development. If this is so, the environmental concerns will not be honestly tackled in a study dealing with a stand-alone golf course. Indeed, the most cynical of critics fear that whoever is masterminding the project is engaged in a massive sleight-of-hand. He is showing a golf course to the public and distracting its attention by waving EIAs and technical studies, while slipping in unnoticed a major residential development project.

Other problems pop up. Will the terms of reference for the MEPA/MTA studies require different project configurations? What will they be based on? How will the government and its consultants (hired guns who will leave the scene once paid for their services) configure the project to ensure financial viability?

At what point would eventual investors be sought? What will be the balance between the real estate side of the project and the golf course? Is it the role of a socially progressive Nationalist government (to say nothing of a possible socialist one) to embark on a luxury residence complex after having chased farmers from the land they have tilled for decades?

There are other fundamental aspects which merit questioning. The MTA Website discloses in a roundabout way that the Authority has taken responsibility for driving the environmental impact assessment process by overseeing the preparation of the project description document and commissioning 13 or so studies required for the EIA. In short, the government is now the sponsor and developer, but nothing has been disclosed publicly about the cost of the exercise, the use that will be made of the EIA, or the procedures that will be followed to recover costs and select the eventual developer.

Why is a government elected on a platform of privatisation and facilitating the private sector transforming itself into a golf course developer? A golf course is not a public good, like a hospital or a power station, so the government is taking over the land on false pretences. A golf course belongs entirely in the private sector that should bear the risks and costs and enjoy the benefits. On present showing, the government is bearing the costs until a private developer comes around to pocket the benefits.

In other words, a golf course would be exclusive of all but a few score and the project should not be on the agenda of any political party.

A golf course would transfer public land for private profit and enjoyment; the loss would be certain, the profit would be most uncertain. A golf course would deprive the people of a large part of what open land remains and be a burden on the public exchequer, that is, on the taxpayer who would have to disburse increasing subsidies on water and energy. A golf course cannot possibly be a paying proposition because it makes great demands on what is scarcest on the Maltese Islands. We should be concentrating our resources on what we have in abundance - history, monuments and archaeological sites.

One last question - who defined politics as the conduct of public affairs for private advantage?

Notes and references

1. University of Florida Institute of Food and Agricultural Sciences; note that Florida uses drought-resistant grass even though on average it has more rain than Malta.
2. Water Services Corporation, 2004 Annual Report.
3. Ibid.
4. Northern Ireland Tourist Board and UK Tourism Survey, 2001.