Sunday, 23 August 2009

Shock During the Lull

23rd August 2009
The Malta Independent on Sunday

Mid-August is normally a time when regular columnists struggle to find topics of interest to keep their readers engaged. Last week proved anything but a typical dry wilderness for interesting news. Let me share three topics with you, which shocked me at a time when I should have been relaxing.

I have been following the serialisation by Labour MP Evarist Bartolo of the process which led to the award of the new power station equipment contract to a Danish firm proposing diesel powered equipment, which is anything but cutting edge in green technology. Bartolo utters no platitudes and surely avoids generic unsupported allegations typical of many cross-political accusations where wrongdoing is suspected but not proven.

Bartolo gave a detailed chapter and verse account of how the successful bidder, through their Malta agent, had privileged, unfair and inappropriate access to internal Enemalta personnel, which, at the very least, gave them additional time to prepare their bid but, more probable and more seriously, helped them influence the technical specifications of the tender to their advantage.

What was particularly shocking in the latest revelations was how government shifted from its original position insisting on gas fired green technology that could be expected to stay well within emissions limits, as they may be tightened up over the lifetime of the equipment, to diesel powered equipment that could well breach such emissions limits as they are expected to evolve during the economic lifetime of such equipment.

Such revelations in a country where good governance has any meaning would have led to either an outright denial accompanied by legal proceedings for slander or libel, or to full scale open and rigorous investigations. But because our governance standards still make many Third World countries surpass us, the only reply we got was perfect silence.

It is the same perfect silence that accompanies claims of schools using their pricing power to increase fees far higher than is justified by the rate of general inflation. I have experienced this as I have been notified that next year’s fees of a private school will be increased by 10 per cent across the board. The school is also seeking to finance new investment for expansion through donation type of contributions, which will knocked off the last bill when the child reaches school leaving age. This “donation” or “advance payment” is not obligatory but, strangely, has to be “opted out” rather than “consented in”. Is this not a deliberate attempt to embarrass parents that opt out? Is this fair when many parents have to struggle in these hard economic days to keep up with current commitments let alone take on new ones?

Schools have pricing power. Parents who typically put their children’s interest first, will make whatever sacrifices are necessary to provide continuity in the children’s educational process rather than shop around for the cheapest alternative. But it is not fair that schools treat parents like sitting ducks without any protection from any regulatory agency that should authorise increase in fees beyond the level of general inflation.

How can we on one hand expect workers to dismantle the partial indexation of their wages through the COLA and then allow operators who have pricing power to use it without any inhibition? The argument that many schools are run on a non-profit basis is no justification for a free hand in price setting. Like all commercial organisations that lost their pricing power during these recessionary days, the focus of their economic survival has to be cost cutting and innovation. Those who simply take the pricing power route need to be regulated.

The last shocker for the week was Minister Austin Gatt finding time in his busy schedule to proclaim in an op-ed in The Times that the establishment of the Malta Transportation (Regulatory) Authority, through the consolidation of the Malta Maritime Authority, the ADT and the Dept of Civil Aviation, will, next year, solve all the travails we have been suffering for decades in our public transport services.

The Minister assures that next year we shall see a radically transformed public transport service, with modern buses, a more efficient bus network, and a private operator with ability and motivation to improve the service and increase patronage. The reform of the unscheduled and taxi service will be completed (with true liberalisation I hope), water taxis will be introduced and the intra-harbour ferry service will be strengthened and extended. All this while building the most important road arteries from the Freeport to San Lawrenz in Gozo.

Why was I shocked at such good news, you may ask? I was shocked because it reminded me of my days at the bank when regular loan defaulters used to demand as of right fresh accommodation, promising free drinks tomorrow to wipe clean yesterday’s faults.

This government is not exactly a new kid on the block. What the Minister is promising for next year has been promised before and should have been in place a long time ago. This government has an inverted sense of priorities. All that the Minister is promising should have been introduced before speed cameras, wardens, VRTs and all the rigmarole that is giving us the worst of both worlds, i.e. expensive discipline on sub-standard roads without any real alternative to private transport.

And before embarking on such grand projects, the new Authority should first solve the problem of reserved parking for residents. Until the time comes when residents start paying local taxes, this concept should be abolished. There is no taxation without representation; equally there should be no rights without taxation. Unless the residents pay something that I don’t pay for, I should have the same right to park anywhere like they do.

What is also shocking is any expectation that the mere merger of various authorities will deliver what was elusive when they operated separately. Set-up and structure are important, necessary, but not sufficient. Equally important are the attributes of determination, managerial ability, transparency and a sense of urgency in efficient execution with political support to do what’s right rather than what’s popular.

Enough shocks for August please!

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