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MIA, by its own nature is in a class of its own. It will always be a monopoly.Malta will always have one airport, unless vertical take-off passenger planes are invented or unless we turn crazy enough to go ahead with the Gozo airstrip.
Mid-Med had a large chunk of the market giving it a dominant position but it was not a monopoly. Maltapost has a monopoly put limited to normal letters and it is likely that this monopoly will have to go under EU rules. In any event the current monopoly of Maltapost has an expiry date.
MIA on the contrary is a perpetual monopoly. This gives it two distinct characteristics. Firstly that it can make monopoly profits particularly as air travel is by far the most practical means of travelling abroad of islanders in the middle of theMediterranean .. Secondly it has strategic interest for Malta ’s development especially in being managed in a way complimentary to our tourism policies.
The Nationalist government took a very different approach to privatising MIA. It has offered 40% equity stake to a strategic partner and has committed itself to sell the remaining 60% as an IPO in gradual tranches of 20% each.
This is highly risky. With 40% equity the strategic partner will have full control over the company as the remaining 60% will be very thinly spread.Malta ’s one and only airport will be controlled by a foreign strategic partner who could well decide to manage in a way out of sync with national objective related to tourism.
Apart from this, as sure as night follows day, the strategic partner with practical control of the Board and the Annual General Meeting will favour itself with management and technical services agreement which will run MIA dry ensuring that the profit are made to accrue mostly to the strategic partner rather than be left to sink to the company’s bottom line in the interest of all shareholders.
To complete the privatisation fiasco a third leg was needed to the two legs born out of the privatisations of Mid-Med Bank and Maltapost. The MIA privatisation provided the third leg making the fiasco solid and complete.
“With 40% equity the strategic partner will have full control over the company as the remaining 60% will be very thinly spread.”
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MIA, by its own nature is in a class of its own. It will always be a monopoly.
Mid-Med had a large chunk of the market giving it a dominant position but it was not a monopoly. Maltapost has a monopoly put limited to normal letters and it is likely that this monopoly will have to go under EU rules. In any event the current monopoly of Maltapost has an expiry date.
MIA on the contrary is a perpetual monopoly. This gives it two distinct characteristics. Firstly that it can make monopoly profits particularly as air travel is by far the most practical means of travelling abroad of islanders in the middle of the
For this purpose when the last Labour government of 1996-1998 had identified MIA as a potential candidate forprivatisation in order to generate exceptional revenue flows to contain the huge fiscal deficit inherited from the Nationalist governments, it had set very strict parameters.
It had set that the government will continue to hold a majority stake of 60% to ensure it can keep control over this strategic company. Secondly it had decided to privatise 40% by splitting this minority stake in two separate parts. 20% would be sold to a strategic partner who could be seen as a capable of contributing value added by means of management expertise and procurement of international business. The residual 20% had to be sold to the Maltese general public through an IPO on the local market.
It had set that the government will continue to hold a majority stake of 60% to ensure it can keep control over this strategic company. Secondly it had decided to privatise 40% by splitting this minority stake in two separate parts. 20% would be sold to a strategic partner who could be seen as a capable of contributing value added by means of management expertise and procurement of international business. The residual 20% had to be sold to the Maltese general public through an IPO on the local market.
“Unlike Labour, minister Dalli and his PrivatisationUnit team have again betrayed the national interest passing control over a national monopoly to a foreign strategic partner”
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The Nationalist government took a very different approach to privatising MIA. It has offered 40% equity stake to a strategic partner and has committed itself to sell the remaining 60% as an IPO in gradual tranches of 20% each.
This is highly risky. With 40% equity the strategic partner will have full control over the company as the remaining 60% will be very thinly spread.
Apart from this, as sure as night follows day, the strategic partner with practical control of the Board and the Annual General Meeting will favour itself with management and technical services agreement which will run MIA dry ensuring that the profit are made to accrue mostly to the strategic partner rather than be left to sink to the company’s bottom line in the interest of all shareholders.
So the MIA deal is structurally wrong. Government can boast as much as it wants that it got more than Labourgovernment had pencilled in as a figures for floatation of 40% in a very different manner. The two are incomparable. Unlike Labour, minister Dalli and his Privatisation Unit team have again betrayed the national interest passing control over a national monopoly to a foreign strategic partner with a carte blanche to milk the MIA from its profits through technical service fees to the detriment of the remaining 60% shareholders.
And let me make one thing very clear. Should a Labour government get elected whilst still holding control over the company it will use that control to re-address the strategic national risk which this irresponsible minority stake involves. If on the other hand a Labour government would find no government equity in MIA to re-address the matter, it will use other sovereign tools to ensure that the national interest is protected and that monopoly powers are not abused by the private sector.
And where is the promised transparency?
Who conducted the deal the Privatisation Unit or minister Dalli personally?
How is it that a preferred bidder chosen by Cabinet decision gets pipped out by another bidder without reference to Cabinet?
Was the minister holding private meetings with the local representatives of the chosen consortium whilst the selection process was going on?
And why were the revised bids not opened in public under sealed conditions?
Members of the Privatisation Unit should either express publicly their reservations about the selection process or else shoulder responsibility together with the Minister for betrayal ofMalta ’s national interest.
And let me make one thing very clear. Should a Labour government get elected whilst still holding control over the company it will use that control to re-address the strategic national risk which this irresponsible minority stake involves. If on the other hand a Labour government would find no government equity in MIA to re-address the matter, it will use other sovereign tools to ensure that the national interest is protected and that monopoly powers are not abused by the private sector.
And where is the promised transparency?
Who conducted the deal the Privatisation Unit or minister Dalli personally?
How is it that a preferred bidder chosen by Cabinet decision gets pipped out by another bidder without reference to Cabinet?
Was the minister holding private meetings with the local representatives of the chosen consortium whilst the selection process was going on?
And why were the revised bids not opened in public under sealed conditions?
Members of the Privatisation Unit should either express publicly their reservations about the selection process or else shoulder responsibility together with the Minister for betrayal of
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