Let`s Imagine

Maltastar   

   

 

Let’s imagine that John Dalli has made the magnificent deal that he claims for MIA privatisation.

“we are truly leaving our economic fortunes hostage to destiny”

Let’s forget for a moment that in selling 40% to a foreign consortium he has actually given them total control over MIA and the facility to help themselves to lucrative management and technical services contracts that enable them to cream off most of the company’s profits with just 40% equity.

Let’s forget for just a few minutes that after the three year silent period the consortium can work up their shareholding to total majority forcing a sovereign state to have its one and only airport run and controlled by private foreign commercial interests. Let’s forget that there is not one country in the world whose one and only airport is controlled by foreign interest even though other countries, who are not islands like Malta, are much less dependent on foreign air travel than we are.

 

Let’s imagine that John Dalli truly got Lm40 million for the sale of the 40% equity of MIA and that this figure is not really fudged or inflated by declaration of dividends for all accumulated profits, taxes on sale of property and advance lease payments for the property which the government has leased back to MIA. Let’s imagine that the Lm40 million is truly clean net cash to the government for sale of the 40% equity in MIA to this foreign consortium.

“Now stop imagining and come back to real life. By whatever standard you look at it this is a national tragedy”

Let’s for just a moment imagine that the process was fair and clean that the losing consortium composed of some of the most respected names in the world such as the US Bechtel and the Changi Airport company of Singapore together with Manchester Airport of UK, are in fact bad losers. Let’s imagine that they are inventing when they claim that their offer was somehow made available to the competing bidder who could obviously just top it up to win the bid.

Let’s imagine the losing consortium are totally wrong in claiming that the government could not close the deal with a third party when they were kept in their status of preferred bidder and that they should have been given the opportunity to match the best terms before being exonerated from their preferred bidder status.

Where would such an imagination leave us?

It would leave us with two simple conclusions:

Firstly is that unless a Labour Government is elected in good time to re-address the deal in the national interest, we are again about to lose control over a critical artery for our tourism industry which represents the blood circulating through the national economy. If the foreign consortium soon in control of this critical artery adopts a management policy out of line with our national tourism priorities (e.g. giving more importance to cargo distribution rather than incoming tourism in the allocation of airport slots and resources) we are truly leaving our economic fortunes hostage to destiny.

 

The second conclusion is that this is a self-signed certificate by Minister Dalli of the gross incompetence with which the privatisation of Mid-Med Bank was concluded. There again the total control of a major artery to our economy was ceded to a foreign organisation.

The price for 67% of Mid-Med Bank was Lm71 million making the whole bank valued at Lm105.6 million.

The price for 40% of MIA is reported at Lm40 million making the whole MIA valued at Lm100 million.

Now can anyone explain why a company like Mid-Med Bank consistently returning annual profits five times more than MIA and controlling half the banking market should be valued roughly the same as MIA?

Given that both cases gave practical control of the organisation to the foreign acquirer (in case of Mid-Med Bank even more solid as accompanied by outright solid majority control by HSBC) the MIA privatisation underlines and augments the great pasticcio single-handedly carried out by Minister Dalli in the privatisation of Mid-Med Bank. By MIA standards it should have raked in more, much more, much much more.

So when the Prime Minister says that Lm10 million here or there don’t really matter he is getting the figure wrong. It is more like Lm70 million here or there. Now this is being confirmed by none other than John Dalli through his self-flattery over the MIA deal.

Now stop imagining and come back to real life. By whatever standard you look at it this is a national tragedy.