Update 4: Roads 'to be transferred to private sector' - Labour reaction

Roads Minister Austin Gatt said today with the current standard of the road network being unacceptable, the government intends moving to a system where a private contractor would be responsible for the roads.

The contract would be published internationally in the third quarter of this year.

The minister made his comments when he gave a overview of his ministry’s activities at a meeting of Malta’s consuls.

In a clarification following the comments by the minister, the Roads Ministry explained that the government has no intention of “privatising” the road network but is exploring a long-term solution on the basis of a PPP contract (Public Private Partnership) to road building, repair and maintenance, leveraging the normal 25 year lifetime of a well-built and maintained road against the financial cost thereof.

"What this basically means is that you have a management contract for a group of roads where the standards for building and maintaining the road are set and monitored by the government which pays a yearly set fee to a contractor who binds himself to build, re-build, re-surface and mantain the road to the standards set by the government.

"There is no privatisation of the road network involved but merely a long-term (typically 25 years) management contract between Government and the contractor. Financially, the long term element of the management contract and the guaranteed income for the contractor is leveraged in order to ensure that works are executed in the initial part of the contract and paid for in the later part thereof.

"This type of relationship is a typical PPP contract totally similar to that used for the building and running of the Mellieha Old People’s Home. It is also the typical arrangement nowadays used in most EU countries for road building and maintenance. It is also worth noting that for many years now, all works connected with roads in Malta are not done by the government but are contracted out."

Dr Gatt in his speech said that in the public transport sector, there would be a modal shift from private to public transportation. The government would be issuing an international tender of substantial value for operators to invest and operate the entire Maltese bus network.

The government would also offer incentives for electric or less polluting modes of transportation and continue to liberalise the market.

When he spoke on harbour development, he said there were plans to have facilities for temporary and permanent berthing of yachts at Sa Maison and Kalkara.

On urban regeneration, Dr Gatt said the Opera House site would be transformed into a cultural centre but made no mention of moving Parliament. He said there would be an open theatre at Freedom Square and a garden at Main Ditch.

LABOUR REACTION

The Labour Party in an initial reaction to Dr Gatt's comments, said that no mention of the government's plan had been made in the Budget for this year.

This meant that either the government had kept its intentions hidden, or it had only thought about this now. This was a repetition how the Opera House project was handled.

The PL said it would comment in detail when the government's plans were fully explained. This explanation should include what would happen to EU funds allocated for the roads; whether consumers would be required to pay road tolls; what would happen to road workers; whether these plans included roads which fell under local councils' responsibility and what consultations had been made.

Dr Gatt's comments, however, confirmed the government's 22-year failure in the roads sector.

As for the redevelopment of the Opera House site, the PL said the Prime Minister should explain in detail what the government's plans were, particularly on the relocation of Parliament.

Replying to the PL, the ministry denied that the changes the government was proposing would require any payment from the public.

It said it had already made it clear that discussions were still at an early stage and all concerned paries would be consulted.

All this was being done for the country to have suitable and secure roads.