The government does not have a target date by when it plans to establish the way in which it will be financing the City Gate project where works are moving full steam ahead.
When asked about the project’s €80 million financing, Prime Minister Lawrence Gonzi said yesterday it was only a question of when and not from where the money would come.
Two years ago, the government announced in the Budget that it intended setting up a so-called special purpose vehicle, a financial mechanism through which a company would raise money for the project and then lease it to the government over a number of years.
Two years on, however, the special vehicle has not seen the light of day.
Dr Gonzi hit out at the opposition’s constant criticism of the project, describing the Labour Party’s arguments as “banal and superficial”.
“The Finance Minister gave opposition spokesman Charles Mangion a presentation on the special purpose vehicle and so they know where the money will come from,” Dr Gonzi said. The special purpose vehicle had not been set up yet, he added, but it would be set up “at the appropriate time”.
He was reacting to the latest questions by Opposition Leader Joseph Muscat who on Wednesday questioned the financial underpinnings of the project, given it had been absent from budgetary estimates for two consecutive years.
Dr Gonzi defended the investment, insisting that it would help free up the President’s Palace in St George’s Square – where Parliament is housed– which will be transformed into a historical centre piece for Valletta.
“This will create another attraction that will benefit the commercial community,” he said.
Dr Gonzi hit out at the PL, questioning the opposition’s “superficial and amateurish economic strategy” that does away with important capital investments.
A day after presenting a Bill that introduces a constitutional obligation to have a balanced Budget, Dr Gonzi said the Parliament building project was part of the strategy to achieve growth and reduce the deficit.
“We have to burst the bubble that the expense will be recurring every year as the opposition tries to suggest. A capital investment is only done once and it will give us other benefits,” he said.
The opposition should stop scaring people about capital projects that improved quality of life, he added.
Dr Gonzi was answering questions during a visit to Palazzo Vittoriosa, a renovated high-end boutique hotel in Vittoriosa, where he spoke about the record tourist figures for 2011.
Asked about the €40 million government was planning to cut from public expenditure, Dr Gonzi said heads of department and authority chairmen had communicated their plans to reduce expenses and talks were underway.
The bulk of the savings would come from an employment freeze in the civil service by not replacing retired individuals. But Dr Gonzi said the no-replacement policy would not affect crucial areas such as the police, teachers and doctors.
ksansone@timesofmalta.com