It always seems slightly ungrateful to question good news, particularly when such good news has been awaited for years. This is about the recent announcement that talks have finally been concluded with Ablecare Oilfield Services about the former Malta Shipbuilding site, which will be transformed into a Mediterranean Maritime Hub.
Unfortunately, there was little to rejoice about because the news added nothing to what had already been announced when the memorandum of understanding was signed last September. We already knew the company would be investing €55 million, that it would be taking over the whole of the site and that it would have an oil and gas servicing facility.
What happened since then? Unofficially, government sources have been speaking about the complexity of the contract because of legacy issues, including operators there on encroachment, each of which had to be dealt with so the site could be given to the new concessionaire free of any encumbrance.
The government started the process in June 2013 with the issue of an international call for expressions of interest. Both the present government and the previous administration surely realise the value this unique stretch of land – 175,000 square metres of it with quay space in the Grand Harbour – has and the contribution it can make to the economy, generating value-added activity and jobs.
So why were the legacy issues not addressed and concluded soonest, knowing it was only a matter of time till the site had to be freed up?
The ‘agreement’ has to be submitted for parliamentary approval, which makes the lack of detail even more bewildering. The Nationalist Party has already tabled a number of parliamentary questions about the project. Hopefully, some fresh, useful information would be furnished by the minister.
A press conference was hurriedly called late one afternoon to announce absolutely nothing more than what was already in the public domain. Was this meant purely as an exercise to give the impression to the public that progress was being made? Could it have been yet another attempt to distract the attention of the public from the Panama Papers?
We know Ablecare will be investing €55 million but it has not yet been explained how much of that will be upfront investment. The government has “proposed a 45-year emphyteusis” but it could be more. Taken to the extreme, it could mean the company will be investing €1.2 million a year, not exactly an economic breakthrough, and probably not much more than it has been spending now for the temporary use of the quay for oil rig contracts, something it has been doing since October 2013.
Apart from how much upfront investment and the duration of the emphyteusis, the actual concession fee will be of interest as well as information about who will be paying for the dredging of the seabed. This is not likely to be an insignificant cost – estimated at over €10 million – over and above other work on the site, which is supposed to be handed over tale quale, including refurbishment and maintenance of the dock. Has something changed since this latter condition was first imposed? If so, how fair would that be on the other five bidders that based their offers on this information?
How wise will it turn out to be to have put all our eggs – in this case, the entire site as opposed to part of it – into one sector and one which is going through its most challenging times given the price of oil?