Who pays? Who gains?
By a Special Correspondent
What's the point of having an Opposition if it makes the same mistakes as the
Government? The recently revealed policy stand of the MLP on the proposed golf
course criticises the Government's proposal superficially; but it does not
tackle the main issue, namely, that a new golf course - at Ix-Xaghra l-Hamra,
Ta' Cenc or wherever - would make too heavy demands on some of our scarcest
resources - land, water and energy.
The MLP and others, while criticising the social and environmental
implications of a golf course, seem to have accepted the Government's assumption
that a golf course would be of economic benefit to Malta.
However, the main problem is that one golf course does not make economic
sense and three (or "a few") golf courses would be an unbearable burden on our
island. We already have a golf course at Marsa. It probably needs to be
upgraded. But anything more than that would be grossly uneconomic for Malta as a
whole, though it might be profitable for some individuals.
Water, land, oil
Let's start with the obvious. A golf course guzzles huge amounts of water.
The bigger it is, the more water it swallows. One can calculate that it would
need about 500,000 m3 of water a year,1 that is, about one and a half times the
production of non-potable water in Malta.2 Water is currently charged at about
Lm1.25 per m3. But its true cost is higher because of subsidies; the WSC
continues to receive an annual subsidy of about Lm8 million from Government.3
Most of our water is produced by desalination plants which run on oil and the
price of oil is high and rising; hence Enemalta's financial deficit.
Nobody can predict the price of oil in five or ten years' time, but it would
be foolish not to allow for the possibility of heavy price increases in
calculating a project's profitability. On present showing, it seems more than
likely that in future the owners of a possible golf course would have to
pressure or blackmail the government for ever-increasing subsidies, or further
concessions which would be undesirable on environmental and social grounds (see
below). In other words, a golf course would become a green elephant. A few golf
courses would mean a few green elephants.
Another obvious thing is land. Malta is the most densely populated country in
Europe and one of the most densely populated in the world. About 1,300 of us are
crowded on every square kilometre. Comparisons with other countries must be made
with great caution.
Cyprus has a surface area 30 times that of Malta; Tunisia's is more than 500
times ours. A golf course would take up an area which could accommodate 70
football pitches; three golf courses, three times as many. Over 99 per cent of
the population would be excluded from that area, which would be the preserve of
rich tourists and rich Maltese. Is that the best way to promote social harmony,
let alone socialist equality? Would we not be going back to the bad old days
when Malta was a British base and several plum sites were fenced off and out of
bounds for the Maltese?
Can all this be justified by the argument that a golf course would bring
30,000 rich tourists a year? The problem here is that nobody has explained
rationally how this figure was arrived at. Indeed, some critical calculations
indicate that it is all pie in the sky.
For instance, Ireland is blessed with abundant rainwater and much more space
than us. It has hundreds of golf courses and is the sixth golf tourism
destination in the world, the first being the United States. In 2001, Ireland
attracted about 110,000 golf tourists from the United Kingdom - its largest
market and probably Malta's, too - but 75 per cent of them travelled by sea.4
And let us not forget that rich golfers travel to a country where they expect to
find several golf courses.
It is difficult to see Malta replicating Ireland's performance with one to
three golf courses and higher travel costs. When push comes to shove and fiction
turns to reality, we may find that the 30,000 rich tourists add up to only a few
dozen or a few hundred at best. In any case, the market studies being conducted
by MEPA should give detailed and well-reasoned calculations for the expected
number of "rich golf tourists" and not simply indulge politicians' penchant for
happy-go-lucky optimism.
Who gains?
So what benefits do our leaders in Government and Opposition expect from a
golf course, or maybe a few of them? And who will pocket them? While we await
with bated breath the publication of MEPA's serious calculations, we can look at
the basics. Golf courses (including those owned by municipalities) are usually
operated for profit. In Europe and the US most of them draw about 40 per cent of
their revenues from membership or initiation fees, with an average of less than
30 per cent from playing fees. The balance is covered by sales and other fees.
In the case of a self-standing golf course in Malta, membership fees would
probably be limited; after all, you cannot charge even a rich tourist an annual
membership fee for a stay of a few days or weeks. So playing fees would have to
rise considerably to break even and this would adversely affect the golf
course's competitiveness.
How about costs? Water at the current price of Lm1.25 per m3 indicates that
each one of the 30,000 rich golfers would have to be charged Lm21 just to cover
the water charges. If the cost of water doubles, because of rising energy costs,
and only 10,000 of the 30,000 imagined tourists turn up, they would each have to
pay some Lm126 to cover water charges. And you have not yet factored in capital
costs, financial charges and taxes, maintenance and administrative costs
(including wages), and so on.
This explains why golf courses are often viable only in the context of larger
real estate development projects. That is the only way to cover part of
development costs and pass on some of the burden of annual upkeep to residents.
This aspect was taken into account by the now defunct Verdala project, but has
been downplayed by the Government and ignored by the Opposition.
The undeclared object of the project may well be a real estate development.
If this is so, the environmental concerns will not be honestly tackled in a
study dealing with a stand-alone golf course. Indeed, the most cynical of
critics fear that whoever is masterminding the project is engaged in a massive
sleight-of-hand. He is showing a golf course to the public and distracting its
attention by waving EIAs and technical studies, while slipping in unnoticed a
major residential development project.
Other problems pop up. Will the terms of reference for the MEPA/MTA studies
require different project configurations? What will they be based on? How will
the government and its consultants (hired guns who will leave the scene once
paid for their services) configure the project to ensure financial viability?
At what point would eventual investors be sought? What will be the balance
between the real estate side of the project and the golf course? Is it the role
of a socially progressive Nationalist government (to say nothing of a possible
socialist one) to embark on a luxury residence complex after having chased
farmers from the land they have tilled for decades?
There are other fundamental aspects which merit questioning. The MTA Website
discloses in a roundabout way that the Authority has taken responsibility for
driving the environmental impact assessment process by overseeing the
preparation of the project description document and commissioning 13 or so
studies required for the EIA. In short, the government is now the sponsor and
developer, but nothing has been disclosed publicly about the cost of the
exercise, the use that will be made of the EIA, or the procedures that will be
followed to recover costs and select the eventual developer.
Why is a government elected on a platform of privatisation and facilitating
the private sector transforming itself into a golf course developer? A golf
course is not a public good, like a hospital or a power station, so the
government is taking over the land on false pretences. A golf course belongs
entirely in the private sector that should bear the risks and costs and enjoy
the benefits. On present showing, the government is bearing the costs until a
private developer comes around to pocket the benefits.
In other words, a golf course would be exclusive of all but a few score and
the project should not be on the agenda of any political party.
A golf course would transfer public land for private profit and enjoyment;
the loss would be certain, the profit would be most uncertain. A golf course
would deprive the people of a large part of what open land remains and be a
burden on the public exchequer, that is, on the taxpayer who would have to
disburse increasing subsidies on water and energy. A golf course cannot possibly
be a paying proposition because it makes great demands on what is scarcest on
the Maltese Islands. We should be concentrating our resources on what we have in
abundance - history, monuments and archaeological sites.
One last question - who defined politics as the conduct of public affairs for
private advantage?
Notes and references
- University of Florida Institute of Food and Agricultural Sciences; note
that Florida uses drought-resistant grass even though on average it has
more rain than Malta.
- Water Services Corporation, 2004 Annual Report.
- Ibid.
- Northern Ireland Tourist Board and UK Tourism Survey, 2001.
• Up • Elephants • The Myth • Garigue in Malta • Not Viable • Golf Logic • The Debate • Med Flora • Sacrifice • Who Pays? • Broken Promises • Building Starts • Suspicious • Wide Angle Alternatives • Good for the syndicate • Constitutional right to enjoyment of environment • Talking Point • Asking the right questions • Golfcourse Blues • A sign of things to come • Protect our open spaces •
