'Commercialisation not privatisation'

The House on Tuesday unanimously approved the second reading of the Freeports (Amendment) Bill, which broadens the powers of the Freeport Authority to include the creation of servitudes and similar rights under certain conditions.

Winding up the debate, Parliamentary Secretary Jason Azzopardi said that the agreement with Gasco was not a privatisation but a commercialisation process, where the government was retaining land ownership of the Bengħisa area, where the gas bottling plant would be built.

Gasco will be responsible also for operating the plant which will be transferred to the government after 33 years. The company is obliged to use the latest technology in the plant's operation.

Dr Azzopardi said Gasco would also decommission the bottling plant at Qajjenza so that the quality of life in the area in particular and in Birzebbuga in general would be greatly enhanced. He said that the Qajjenza plant did not conform to the standards set by EU 'Seveso' directive.

The Parliamentary Secretary also dwelt on the agreement between the government and the opposition to restrict companies transferring government land which came into their possession land on sub-emphytheusis. These can now only do so either through a call for tenders or through parliamentary approval.

Competition in the gas energy sector benefits the consumer. The government was committed to safeguard low-income families and these would be helped directly through energy saving benefits and not through subsidies. The agreement did not give a free hand to Gasco to increase prices.

He added that the Malta Resources Authority and the Office of Fair Competition would be vigilant to see the operator did not enjoy a dominant position in the market.

Consumers would also benefit because the plant would be more cost-effective and would be more environmentally-friendly. Enterprises which employ less than 10 workers would not be further burdened.

Dr Azzopardi gave details of the contractual obligations of Gasco, pointing out that the government studied the legal implications of the proposal made by Notary Charles Mangion and would therefore be presenting an amendment which ensured better accountability.

In this context, the Parliamentary Secretary emphasised the collaboration between government and opposition.

Earlier, Interior Minister Carmelo Mifsud Bonnici, said that the development of the Freeport over the years, and its economic success, were promising. But it was important that the market be regulated in a sensible manner so as to allow for prosperity.

The amendment presented by the government to the Bill gave power to the authority to allow for the fitting of a pipe, facilitated the work of the Malta Free Port Association, and minimised limitations in the world of merchandise transportation.

The roll-on, roll-off was an excellent idea, which assured greater protection of the merchandise. It was important to remain vigilant, so as to remain competitive.

This arrangement, which allowed more freedom to develop and invest, and allowed work in the sector to progress without excessive obstacles, was what the Bill stood for. It proved that Parliament gave its full support to the Malta Freeport Corporation for business to prosper.

Many of those in this sector tended to branch out into other sectors, such as banking. This could potentially increase the economic situation in Malta, and its portfolio.

Dr Mifsud Bonnici said considering that until about 40 years ago Malta was fighting for independence, it was impressive that today it was involved in these sectors on an international level.

Nationalist MP Dr Frans Agius said that the Bill permitted ships to connect to a gas pipeline in Bengħisa. The Maltese and Italian operators were investing in a state of the art gas bottling plant line with the government's privatisation policy.

Mepa must not allow development in the area close to the new bottling plant; this should be used solely for industrial purposes.

Noting that the new bottling plant would exceed the present storage space at Qajjenza. Dr Agius said the Regulatory Body should have the trained personnel to see that regulations were observed.

He appealed to the government to consider the energy sector in a holistic manner, adding that emphasis should be made on controlling wastage.

He said that more investment in solar, wind and alternative energy sources was needed, and called on Gasco to provide environment-friendly fuel.

He dwelt on the global energy crisis, adding that emerging markets were consuming more energy than ever before and suggested that Malta should tap new technologies.

The Seveso directive on chemical hazards ensured the necessary safeguards, which would be followed in this project. Workers at Qajjenza have always taken the necessary precautions to safeguard the residents living nearby.

Once the new gas plant was built, the Qajjenza area needed rehabilitation.

Dr Agius concluded by saying that the Regulatory Body should see that prices were fair.

Joe Falzon (PN) said the speech given by Foreign Affairs Minister Dr Borg (reported in yesterday's The Times) had clarified the main scope of this amendment. It was easy to forget that this government had always worked in favour of privatisation, albeit always in a social context, and it was no surprise that the country had prospered. The government had always used its land assets, limited as they were, in the best possible way.

One of the fundamental things that Parliament should consider, even from the government's point of view, was the use of land. The designation of land, used or unused for other, better uses was exemplary. The Bill safeguarded the interests of the residents living in the area of the old plant.

Mr Falzon said the committees that dealt with the transfer of land for public use always worked with the public's needs in mind. He thanked the Lands Department for producing an excellent lease contract.

Transfers of land often brought about progress in a country, as often they were on concession, and this brought about added prosperity. When privatisation was coupled with political vision, it served to give added value to the country and its economy.

Just months ago there had been the land transfer to Smart City which would open new horizons to the people of Malta and Gozo.

Mr Falzon concluded that in the context of the various challenges Malta faced as a small country, which foreigners often found unbelievable, there was added responsibility when it came to land administration.

Parliamentary Secretary Joe Cassar said the construction of the new gas bottling plant would serve to protect the residents of the area, who had often felt the effects of being so close by.

He mentioned the incident in 2006, when leakages of chemicals from the plant had necessitated the evacuation of a number of Enemalta employees and residents.

The properties in the area of the present plant would also appreciate in value. After careful consideration, the government had deemed it time to relocate, and build a plant in line with EU standards. The plant would also safeguard against the dangers of environmental contamination.

The fact that two incinerators, the one of St Luke's Hospital and that of the Gozo General Hospital, had been closed down by this government, proved its commitment to the environment.

The land proposed for the new plant had been proven to be ideal. Whilst the new plant would have the same storage capacity, there would be an improvement in the importation of gas and in the filling and transportation of cylinders.

Once again the government was fulfilling privatisation promises, and again the country was benefiting, despite the fears the opposition tried to instil.

The new Opposition Leader, as a member of the European Parliament, used to criticise the government for not closing down the old plant. Two weeks ago, he failed to congratulate it, but rather went on about the fears of rising gas prices.

The government had ensured that the consortium would introduce gas for the use in cars to reduce pollution of normal fuel. By 2010, the government aimed for 10 per cent sustainable energy, and a considerable amount of structural funds had been allocated to achieving this.

Dr Cassar concluded that Parliament should approve the Bill because Malta badly needed this gas bottling plant.

Philip Mifsud (PN) said the agreement between the two sides of the House proved that the government was always ready to listen to the opposition.

The Bill regarded servitudes needed to be established between part of the Freeport and land being taken over at Bengħisa for the construction of a new gas filling plant. The amendment just agreed on would close the door to possible abuses in other cases in future.

The Bill meant greater peace of mind to the residents of Il-Qajjenza, who would now no longer be living with the fear of a gas explosion on their doorsteps. And for the next 30 years Malta would have a gas filling plant that was up to modern standards.

It had been very difficult to identify the Bengħisa site, which was two kilometres away from the Freeport and would therefore necessitate a pipeline of that length: The mentioned servitude. The land had come under emphytheusis to the government for 65 years and was now being let on sub-emphytheusis for the next 33 years to Gasco.

Following that time-span the plant would be handed over to the government.

Mr Mifsud said that the move would mean a change from a government monopoly to a private liberalised environment, but the subject-matter was of such a specialised nature that it would be difficult to create another plant.

This liberalisation of the gas market would strengthen the regulator's hands with regard to pricing.

The environment was also sure to benefit from the move. Mr Mifsud said that residents of the Qajjenza area should be rewarded for having put up with the situation for so many years. One way of doing this could be to use the land occupied by the present plant to create a place for the residents' recreation, once it was vacated.

He said he had information that part of the Bengħisa plant would also be used to generate alternative energy: Another plus for the environment. This proved yet again that the government always put the environment in the forefront of its considerations, together with education.

Nationalist MP Francis Zammit Dimech said the Bill reflected the government's courage to privatise commercial activities which were better managed by the private sector. Although everyone was now in favour of privatisation, there had been a time when one had been afraid to say the word because of the chorus of disapproval that would follow.

In the telecommunications sector, for example, everyone now took competition for granted but this had only been the result of a complete evolution in the sector which included privatisation.

From what happened in this sector one could understand what would eventually happen in the energy sector.

The opposition now had to learn how to accept decisions at the time they were being taken and not years later, Dr Zammit Dimech said.

Privatisation now also had to be introduced in the energy sector. The Bill was facilitating the privatisation of Enemalta's gas division. A public call had already been made and two entities - the Maltese company Multigas and the Italian company Liquigas - were chosen to take over the division.

The amendment was making it easier for Liquigas to operate from Malta. This was a company with an important proven track record in other countries, which would give Malta an added value.

The company was also committed to the environmental sector. They considered the environment as a fundamental value which inspired it to provide clean energy systems.

Dr Zammit Dimech said that the government's commitment to the environment had to be reflected through giving alternative energy the utmost importance, reducing dependency on the use of oil.

The government was considering a number of initiatives including wind farms and it was encouraging new energy providers to create energy generation systems and sell their production to Enemalta at commercially acceptable rates.

The country could also be linked to a wider grid, such as the European one because the more alternative sources available, the less it was dependent on a particular source. This made economic sense even for the country.