Editorial | Wednesday, 07 October 2009

Should the Maltese taxpayer worry?

Under normal circumstances, employees - even CEOs - should be allowed the freedom to resign, seek new pastures and move on without any public speculation whatsoever. Private firms will always be of the opinion that the reason why a CEO throws in the towel is nobody’s business but his and that of his employers. This could have very much applied to the curious case of former Smart City CEO Claudio Grech, had his resignation been tendered under normal circumstances – which in his case, it certainly was not.
For starters, at €200 million, Smart City is known to be the largest foreign investment ever made in Malta. The public is anxious to be informed about the fate of the project, chiefly because it concerns the future of the nation’s economy.
Smart City is not just about another story of a private company facing difficult times. The Maltese government, which owns shares in the project, had given Smart City red carpet treatment throughout negotiations. It rented out public land at a pittance, sped up MEPA permits and made a holy cow out of the project. Meanwhile, Tecom (Smart City’s parent company) had negotiated a favourable deal to purchase the then government-owned Maltacom, which allowed the Dubai firm to build a bridge to the European telecoms market. Only a few months after the acquisition of Maltacom, Tecom had invested in a Greek telecoms firm through GO, even though the decision was not necessarily backed by every public shareholder.
Both the government and the Nationalist Party had themed an entire pre-electoral campaign on Smart City, hyping up the investment as one that would guarantee a rosy future to Malta’s economy, and get the PN re-elected. If government is now getting unjustified flak for the situation at Smart City (whatever it is), this is almost a question of karma.
The whole media fuss on Claudio Grech’s resignation is perhaps also partly due to the fact that neither the economy of Malta, nor that of Dubai is very promising at this moment in time. But it is not necessarily the only reason.
For a long time prior to the launch of Smart City Malta, Grech was Austin Gatt’s right-hand man. He was also the chief government negotiator for the entire Smart City deal. After being appointed by Tecom, not by government, as Smart City Malta’s CEO, Grech was made chairman of MITA – government’s IT agency.
Even after Austin Gatt’s reassurances about Grech’s position not implying any conflict of interest, the former Smart City Malta CEO still remains very much associated with government. His resignation may raise eyebrows and questions on whether Grech’s possible divergent views with Smart City automatically imply a fall-out between Tecom and the Maltese government.
It is reassuring to note that if the project fails to meet its deadline Tecom gets to pay a daily fine of €1165. If they do not employ the 5,600 they promised, Tecom has accepted to pay a yearly fine of €931,750.
This reassurance however, does not eliminate the need for the public to know exactly what’s happening. Information is slowly surfacing, but the most important question remains unanswered: should we worry?


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07 October 2009


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