'Government against abuse of privatisation'

Deputy Prime Minister Tonio Borg said yesterday that the government did not want anyone to abuse of privatisation. This was the reason why it was making it imperative that private companies must either issue a call for tenders or have Parliament's approval before transferring government land which was in their possession through sub-emphytheusis and on which they had the right of passage or servitude. This was in line with the thinking of the opposition.

Speaking during the debate on the Malta Freeports (Amendment) Bill, Dr Borg said the government believed more in a social market economy than in a free market economy. If there was something that the government could do better than private enterprise, it should not be privatised.

Explaining the contract giving the Enemalta land on sub-emphytheusis to Gasco, the new company that would produce and distribute gas, Dr Borg said the land would be used only for gas storage.

Such facilities, costing €25 million, are to be built in two-and-a-half years, with a maximum concession of six more months. They would have a capacity of 4,800 tons and the operation would produce 1,200 cylinders an hour.

If the company did not meet its obligations, it would face a penalty of €7,600 per day, capped to €1,400,000. But the contract also stipulated penalties for any material damages.

The company must take out an irrevocable bank guarantee of €1.68 million. The plant must be fully insured and work within world-class safety standards.

The company had a duty to carry out both normal and abnormal maintenance of the pipeline.

Dr Borg said that the old gas bottling plant at Il-Qajjenza would be dismantled by the company itself and this would save the government thousands of euros. This land, he said, had a certain value and the government must look into its future use.

There were further advantages in this contract. The land concession was only for 33 years and, after that time, the plant would revert to the government in good state.

The emphytheusis rate to Gasco would be double the rate Enemalta was paying at present - and it would increase by 15 per cent every five years. Any legal issue would go to arbitration.

Dr Borg noted that, under legislation passed in the 1990s, the law on the transfer of government land did not apply. But with the agreement announced in Parliament between the government and the opposition, private companies would now have to either issue a call for tenders or get Parliament's approval before transferring the land they held under sub- emphytheusis.

Concluding, the minister said he was convinced that this operation would benefit the community.

The Bill was unanimously approved.

Other speakers will be reported tomorrow.