Editorial | Wednesday, 09 July 2008

Liberalisation: keep it going

The liberalisation of the hearse service in Malta is a welcome step that will further enhance competitivity in this sector. This move will hopefully lead to a less expensive service, clearly to the benefit of the consumer before that of the operator. The practice in this sector was absurd, where a mere eleven operators dictated the market for over forty years, thus shielding themselves from the forces of competition. The minister’s action in putting an end to this restrictive practice deserves full praise and must serve as a guideline of just how other sectors should be opened up - if the policy of liberalisation is to be applied (as it should) to all sectors, including those operated by government. Austin Gatt took the bull by the horns in the same way other European governments are doing in the name of free trade, the abolition of restrictive practises and of cartels and monopolies - all of which work exclusively in favour of the operator and not of the consumer and user.
The cabinet decision to liberalise this sector effectively means that no less than fourteen requests made to the ADT will be accepted and eligible applicants will be granted permits. The most positive fallout from this cabinet decision is that the operators will no longer be able to sell their licenses at exorbitant prices, as has been the practise over the years. Consequently anyone will be free to apply and if eligible, be granted a permit.
This decision should serve as a guideline for the opening of other sectors of the economy, which have traditionally been operating as a cartel and a monopoly. Suffice it to mention the taxi service, the Malta-Gozo ferry link and the bus service. Owing to the absence of market forces, all of these are areas where the consumer is not being given a fair deal.
The present state of the public service system is archaic, where passengers often have to travel first to Valletta to then get on to a bus leading to their destination. Malta’s bus service does not run till the early hours of the morning, while many licensed buses are only used on alternate days. What stops government from opening up this sector? Why not allow smaller and fully air conditioned buses to operate from town to town at friendlier hours?
The ferry service between Malta and Gozo also cries out to be liberalised. Allowing competition in this sector also could open up to new opportunities for getting to Gozo direct from Valletta, Sliema and the three cities on smaller and faster boats - perhaps at a more competitive tariff. This would serve to reduce the traffic to Cirkewwa. If government is seen to be liberalising services offered by the private sector there is an equally valid argument for many of the services offered by government itself also to be opened up and liberalised.
The taxi service also needs an overhaul. The limited number of licensed taxis now serves as an incentive to charge exorbitant prices. This practice is best stemmed by opening up the cartel that has often allowed a mere two hundred licensed taxi owners to sell their licenses at incredibly high prices.
Beyond liberalisation, the country is also crying out for new services to be offered. Government should initiate the opening up of sea taxis, which could diminish the amount of traffic on the ground by daily services from popular residential areas to places of work. By thinking out of the box, numerous new opportunities could also be created in the management of government properties.
This weekend, Malta Arts Festival activities are being held in stupendous government-owned venues, which if leased out for a period of twenty years would encourage blue chip foreign and local companies to invest in these areas like fort St Elmo and create more work opportunities and growth.
Arts festival performance are also opening the gates of palatial and artistic places which people are normally unlikely to visit. Their potential as venues for high quality cultural events is immediately apparent. Government should not loose this opportunity to lease out its dormant venues. The injection of private capital can be the best guarantee that these historical gems and national treasures are both looked after and put to good use. Here too the liberalising spirit should be taken up.