Harry Vassallo (May 19) paraphrases his party's badly written position paper on the privatisation of Maltacom (Taking Sweets From Children). In a modern society and a modern economy, there can be no justification for the spectacular lack of grasp of basic facts that Dr Vassallo demonstrates.
The price for the sale of the government's shares in Maltacom was above the average price that companies similar to Maltacom fetched in similar transactions in Europe. Lehman Brothers Europe, who, with all due respect, enjoy global credibility in this sector, reported their view that such transactions fetch an average 6.4 x EBITDA. In Maltacom's case the price was 6.58 x EBITDA.
There was no discount on the value of Maltacom in the price with which the shares were sold. The market share price has no relevance to the price of the transaction of such a large transfer, which has to reflect the actual value of the entity and not the fantasies generated by market speculation. The government was advised by reputable financial consultants that the price negotiated was a good one and, undoubtedly, not a result of some discount.
Dr Vassallo sheds his left-wing mask and shows himself to be a rather reactionary libertarian - pardon the oxymoron - when he questions with hostility the obligations the government imposed on the strategic partner. He appears to have preferred a naked sale, fetching a maximisation of the price, without any type of balance with the country's needs. This shows a great deal of political immaturity as well as a complete indifference to the national interest. The government wanted to find a partner that will develop the commercial activity and expand the investment and wanted to avoid a financial investor whose main aim was to sell what he can to recover quickly what he had paid.
The obligation that no one loses one's job through lay-offs at Maltacom in the coming three years has its price, but is not the only obligation the government has bound the buyers with.
Dr Vassallo dismisses the three-year non-redundancy commitment. No deal can impose on any private sector activity a perpetual guarantee of non-forced redundancy. There should be no such guarantee in any sector of the economy, incidentally. The three-year deal ensures that no redundancies occur as a result of privatisation and that all employees are given a fair chance to work with management and the new owners to help make a success out of the company that employs them. This is real life for anyone working in the private sector who, incidentally, enjoys no such guarantees for three years or more or less.
The government has made it clear from the start of the privatisation process that it is looking for a strategic partner and not simply a financial investor. The choice of a strategic partner is a political choice in the national interest. The national interest is well beyond Dr Vassallo's field of vision. However, what speaks volumes is that Dr Vassallo did not feel he had to voice his disagreement with this strategic option when it was announced over a year ago and decided that this option was not the right one only after the transaction was concluded.
Besides the fact that the price obtained alone is more than what could have been expected in this process, the success of the balance of the agreement for the good of the economy and the Maltese society make this one of the most positive developments in our country's economy in the last few years.
Dr Vassallo makes a surprising argument to try to belittle the country's ambition to become an ICT centre of excellence. He compares this with the effort, during the 1990s, to encourage financial services activity in Malta - helped in a great way by the arrival of HSBC. Dr Vassallo would not blink if the 4,000 Maltese people working today in the financial services sector lost their jobs and packed up for good. Neither would he care if ICT jobs were not created in the country.
Finally, one cannot refrain from noting the stark cynicism with which Dr Vassallo addresses the SmartCity@Malta project. It is evidently clear that the project appears to have disturbed him and, instead of trying to be part of the success which the project is set to be, he pushes his pen to the point that reflects a crying lack of vision and trust in the abilities of the Maltese to deliver excellence.