Theoretically, having a young Opposition Leader should have inspired us to dream about big changes and Alex Borg is struggling to deliver these big ideas for systematic change in Malta. Instead he is mimicking Labour and trying to be a better version of it, but while doing so he is failing to capture a wave of enthusiasm around his projects and proposals.
The fact that Alex Borg is proposing big projects is applaudable in contrast to a government which has turned to maximalist populism and is using public finances as an electoral tool by dishing out unlimited subsidies. However, Alex Borg seems to be surrounded by the wrong people who are giving him the wrong ideas, or the wrong analyses.
This is not surprising. Individuals like Ann Fenech who are advising Alex Borg have little to show for their involvement in public life. Ann Fenech is part of the coterie of Nationalist Party activists who used the government and politics to carve out her own successful business. Any shipper in Malta who can pay top Euros would love to have Ann Fenech and her lawyers on their side and there is no doubt about that, but even for this reason, Ann Fenech, with a reputation of self-interest in politics, may not be the right person to help the Nationalist Party conjure a new maritime policy.
In fact there are some serious problems with Alex Borg’s proposal for a gas and oil terminal in Hurd’s Bank, which he did not address before pitching. First of all, the bunkering set-up that Alex Borg is proposing is not something economically impactful or lucrative for the government under current conditions and the reason is that if the bunkering is managed by one big foreign company (which is most often the case), the government will be raking in just 5% of tax revenues. This is already the case with regard to Alkagesta which is Malta’s biggest bunkering supplier.
Alex Borg doesn’t seem to understand how the industry works, and this is probably because lawyers who are advising him, are not telling him the full picture.
With regard to Hurd’s Bank, there is already a thriving oil-bunkering industry (albeit with a high degree of illegality). Most local oil bunkerers purchase their diesel from Alkagesta who then resell it offshore to ships anchoring in Hurd’s Bank. This is a very small and insular industry restricted to a small number of companies and it is neither labor-intensive nor does it have a strong multiplier effect. It is a very high revenue and cash-intensive industry but the figures of this industry are not necessarily as impactful in the general economy as if the numbers were owned by other industries.
Building a gas terminal would not be enough, but since we already have a local bunkering industry, we can also exploit that. If we can’t properly control and exploit our own local bunkering industry, which is also strategically important, we would be replicating the same mistakes if we build another gas-bunkering industry.
Firstly, I think that the Maltese government itself should get back in the bunkering industry as a strategic measure and this is something that Alex Borg should have also clarified. If we build a gas terminal and replicate the Freeport’s oil bunkering commercial model, we are not going to get a lot of value out of the project. On the other hand, with Malta owning and trading its own oil and gas supplies, while inducing more bunker-trading in Malta, would be more effective and even more realistic.
Alex Borg should keep in mind that he is not just campaigning for the youngest cohorts of society and that some of us do actually remember the Nationalist Party administrations of the past which prompted us in desperation to vote for Joseph Muscat. He should be showing that he is much better than that.
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