The Financing of Fort Cambridge – FAA
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Funding is the lifeline of any major project. Capital is raised through through the stock and bond markets, with major financial institutions acting as underwriters or guarantors.
One of the advantages of having institutions and banks underwrite funding, is that theoretically these professional bodies are bound by strict regulations as to what type of projects can be funded. In fact the international bank sponsoring the Fort Cambridge project is signatory to the Equator Principles, by which banks commit that they will not provide services to projects that violate environmental regulations.
Such standards are the essence of today’s society. Correct financing methodology eliminates projects that are weak, environmentally and /or socially deficient or unfeasible, only allowing the best, more adaptable, sustainable and socially acceptable models to survive. What happened at Fort Cambridge can be considered as the opposite of a civilised economic market system, and the main culprits are the financial institutions underwriting the bonds, the insensitivity of the private investors further down the line, and the gross irresponsibility of MFSA in its capacity as Malta’s financial regulator and watchdog.
The multi-million project, was conceived through a controversial tendering process and violated the Equator Principles as well as EU Directives in its lack of an Environmental Impact Assessment, and yet was sponsored by a bank that prides itself on upholding environmental values. Additionally there was the inhuman degradation of the Crowne Plaze employees, reduced to manual labourers, while the contractor re-negotiated terms with government. Incredibly, the whole project was still given the green light from the underwriters, incredibly the private investors held on to their investment, breach after breach, and incredibly MFSA remained silent throughout the debacle, washing its hands of any responsibility to inform or regulate.
Meanwhile, in the public press, financial analysts turned a blind eye, apparently looking at their own short term gains and suppressing information rather than running an open and informative public commentary on the issue. The project rode roughshod over alarmed residents deprived of traffic impact assesments, with no concern whatsoever to the alarm bells sounded by the various heritage and environmental experts, or by the cracking site itself. Capital flowed into the project, and for those who had second thoughts, pulling out was not an option.
The project is a shameful black feather in our nation’s cap. Government’s involvement as the original landowner, and thus as the original tenderer, causes further outrage, and the whole botched process is therefore harder to accept. The citizens have been betrayed at every level of authority. The MEPA debacle with the discovery of a press statement announcing approval before the hearing even started, perhaps sheds most light on the whole disgraceful charade.
“The Fort Cambridge application is the price Malta is paying for having made it to the euro” commented Noel Grima, editor, TMIS. “For it was the Lm23 million that government received from the developer that plugged the gap in public finances.” However should residents plug the financial deficit with their quality of life? It seems Godfrey Pirotta was right a decade ago, when he said “The Nationalist Government downgraded the importance of public expenditure control. These developments are found to be indicative of a characteristic pattern of politics defined by clientelism.” The end result is residents paying the price for politics and uncontrolled public expenditure with their health.
Flimkien ghal Ambjent Ahjar