The Malta Independent
27th August 2004
Government`s handling of the Dar Malta in Brussels affair is quickly becoming a diabolical exercise in warped logic.
A DOI press statement this week attempted to rebut criticism coming from several quarters, including sources that are generally benign towards the government and who were four square behind government`s policy for EU accession, by focussing on the MLP criticism. It stated that MLP was reacting in a contradictory manner as whilst stating that government must now squeeze out the best opportunities from EU membership on the other hand it is attacking the process of the acquisition of Dar Malta.
So according to the DOI whoever is criticising the acquisition of Dar Malta and the opaque process used for it, is against Malta`s squeezing the best opportunity from the EU. According to government`s logic without spending Lm9 million plus on a Brussels property we just cannot get the best out of EU membership.
This is warped logic at its best and gives more credence to voices clamouring for independent investigation.` If government is constrained to adopt such puerile reasoning to justify the unjustifiable then something is seriously wrong somewhere.
And basically what is wrong is the culture, imbued over four PN legislatures, that success is measured by how much we spend not by how we produce or how much we earn.
I well remember that when in 1996 the new Labour government had briefed me to do a critical strategic assessment of the then MSU, the most evident weakness was the management mission to spend a given budget so as to claim that a certain percentage of the GDP was being spent on IT development. There was little evidence of genuine efforts to ensure that what was being spent was really delivering fair value and little concern that a significant part of the funds were being spent on foreign consultants writing useless reports and on the refurbishing of Villa Portelli.
This same trait still pervades the public sector. Just see how the new hospital project this is becoming an expensive, very expensive, certificate in incompetence in project management and scandalous way of spending public money without obtaining fair value.`
Two major projects were started in Malta just about the same time somewhere around 1995.` The San Raffaele Hospital was started by the public sector and the Portomaso project was started by the private sector (Tumas Group).
As quite often happens, both projects had initial problems to gain the necessary momentum.` The San Raffaele was subjected to several reviews until in 1999 it was decided to re-configure it to absorb the whole operation of St Luke`s. Portomaso could not really start serious development before 1997 until the old hotel was dismantled and the Planning Authority issued their final permits following extensive model testing of the breakwater, logistics and infrastructure.
Comparisons are odious but necessary. The new hospital is still a building site, draining millions well beyond what was budgeted for without any clear indication of when the project is to be completed and become operational. It is even less clear how once operational, the cost of operating such project is to be fitted within the macro-economic objective of containing the operational costs of rendering essential public services. Controversy surrounds this project and the least that can be said is that Skanska`s involvement in project management, in spite of their reputation and experience for handling such large projects and the evident cost to us for using such reputation and experience, has not delivered.
Per contra Portomaso, which in terms of overall development cost would be within a close range to the New Hospital project, is now largely complete with the new Hilton entering its 5th year of operation and several residents celebrating anniversaries of their moving into their new property which has multiplied in value since they bought on plan.` One could well surmise, given the level activity evident, that the project is a commercial success in all its elements. Frankly I think the Portomaso project was technically more difficult to execute given that it involved major excavation work in the heart of an urban spot whilst the New Hospital involved a site on the urban periphery with very minor excavation work.
Given this stark difference in ability in handling large projects it is little wonder that those whose expertise is for spending rather than producing take full control of Dar Malta project in Brussels. The former Minister of Finance has declared that his only involvement in the project was in deciding that acquisition was more economically than renting, an argument which would find very little disagreement. But he made it clear that the choice of the property itself was driven entirely by Malta`s special ambassador for the EU who also has a seat in cabinet. The Prime Minister declaration that the project was endorsed by Cabinet has not clarified whether the Cabinet purely endorsed the Minister of Finance recommendation that acquisition was more economical than renting or whether the Cabinet has examined the whole process for choosing the property in question and takes full responsibility for such a decision.
Rather than waste time in useless Press Statements government should take heed of public opinion and without waiting any further minute pass on the whole process to the Auditor General for an independent inquiry into the whole process leading to this acquisition.
And it would not harm the taxpayers if the Auditor General should show a bit more sensitivity to public opinion and use the autonomy granted to him by the Constitution to take initiative in conducting inquiries in clear cases like the New Hospital and Dar Malta, where there is broad based presumption that public funds are being used in less than optimal manner, to say the least.
27th August 2004
Government`s handling of the Dar Malta in Brussels affair is quickly becoming a diabolical exercise in warped logic.
A DOI press statement this week attempted to rebut criticism coming from several quarters, including sources that are generally benign towards the government and who were four square behind government`s policy for EU accession, by focussing on the MLP criticism. It stated that MLP was reacting in a contradictory manner as whilst stating that government must now squeeze out the best opportunities from EU membership on the other hand it is attacking the process of the acquisition of Dar Malta.
So according to the DOI whoever is criticising the acquisition of Dar Malta and the opaque process used for it, is against Malta`s squeezing the best opportunity from the EU. According to government`s logic without spending Lm9 million plus on a Brussels property we just cannot get the best out of EU membership.
This is warped logic at its best and gives more credence to voices clamouring for independent investigation.` If government is constrained to adopt such puerile reasoning to justify the unjustifiable then something is seriously wrong somewhere.
And basically what is wrong is the culture, imbued over four PN legislatures, that success is measured by how much we spend not by how we produce or how much we earn.
I well remember that when in 1996 the new Labour government had briefed me to do a critical strategic assessment of the then MSU, the most evident weakness was the management mission to spend a given budget so as to claim that a certain percentage of the GDP was being spent on IT development. There was little evidence of genuine efforts to ensure that what was being spent was really delivering fair value and little concern that a significant part of the funds were being spent on foreign consultants writing useless reports and on the refurbishing of Villa Portelli.
This same trait still pervades the public sector. Just see how the new hospital project this is becoming an expensive, very expensive, certificate in incompetence in project management and scandalous way of spending public money without obtaining fair value.`
Two major projects were started in Malta just about the same time somewhere around 1995.` The San Raffaele Hospital was started by the public sector and the Portomaso project was started by the private sector (Tumas Group).
As quite often happens, both projects had initial problems to gain the necessary momentum.` The San Raffaele was subjected to several reviews until in 1999 it was decided to re-configure it to absorb the whole operation of St Luke`s. Portomaso could not really start serious development before 1997 until the old hotel was dismantled and the Planning Authority issued their final permits following extensive model testing of the breakwater, logistics and infrastructure.
Comparisons are odious but necessary. The new hospital is still a building site, draining millions well beyond what was budgeted for without any clear indication of when the project is to be completed and become operational. It is even less clear how once operational, the cost of operating such project is to be fitted within the macro-economic objective of containing the operational costs of rendering essential public services. Controversy surrounds this project and the least that can be said is that Skanska`s involvement in project management, in spite of their reputation and experience for handling such large projects and the evident cost to us for using such reputation and experience, has not delivered.
Per contra Portomaso, which in terms of overall development cost would be within a close range to the New Hospital project, is now largely complete with the new Hilton entering its 5th year of operation and several residents celebrating anniversaries of their moving into their new property which has multiplied in value since they bought on plan.` One could well surmise, given the level activity evident, that the project is a commercial success in all its elements. Frankly I think the Portomaso project was technically more difficult to execute given that it involved major excavation work in the heart of an urban spot whilst the New Hospital involved a site on the urban periphery with very minor excavation work.
Given this stark difference in ability in handling large projects it is little wonder that those whose expertise is for spending rather than producing take full control of Dar Malta project in Brussels. The former Minister of Finance has declared that his only involvement in the project was in deciding that acquisition was more economically than renting, an argument which would find very little disagreement. But he made it clear that the choice of the property itself was driven entirely by Malta`s special ambassador for the EU who also has a seat in cabinet. The Prime Minister declaration that the project was endorsed by Cabinet has not clarified whether the Cabinet purely endorsed the Minister of Finance recommendation that acquisition was more economical than renting or whether the Cabinet has examined the whole process for choosing the property in question and takes full responsibility for such a decision.
Rather than waste time in useless Press Statements government should take heed of public opinion and without waiting any further minute pass on the whole process to the Auditor General for an independent inquiry into the whole process leading to this acquisition.
And it would not harm the taxpayers if the Auditor General should show a bit more sensitivity to public opinion and use the autonomy granted to him by the Constitution to take initiative in conducting inquiries in clear cases like the New Hospital and Dar Malta, where there is broad based presumption that public funds are being used in less than optimal manner, to say the least.
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