When it comes to public domain projects, which are ordinarily of national importance, Governments must stay away from short-term thinking that leads to the over-exploitation of public goods for the benefit of the few.
Max Ganado, the former Managing Partner at Ganado Advocates who is now a Consultant at the firm, makes this point in a thought-provoking LinkedIn message to his network, illustrating his argument by pointing towards developments within offshore wind projects.
Dr Ganado points out that Malta is preparing to implement a strategy on offshore wind. Indeed, last month, the Government launched a public consultation entitled ‘National Policy for the Deployment of Offshore Renewable Energy’.
This consultation, expected to conclude by the end of September, encourages private investment in large renewable energy projects in Malta’s Exclusive Economic Zone. After this period of consultation, the government will evaluate the feedback from the public and open an international call for expression of interest, which will result in the shortlisting of bidders.
Dr Ganado also highlighted that the UK Government, late last week, expressed disappointment by the lack of bids by developers and operators for its offshore wind auction, “as the price for energy offered was too low”.
On this point, Dr Ganado says that any country needs to be “very cautious” as previous projects show that “entrepreneurs want guaranteed levels of income….set in a fixed point in time, like derivatives”.
“They can raise prices when costs go up, but they never share mega profits when windfalls come”.
Indeed, here, Dr Ganado stresses the need for “new thinking” on public domain projects. As Governments award national projects to investors, following a public call for bids, Dr Ganado argues that it cannot be a situation where only investors profit off public goods, leading to over-exploitation.
“Sharing risks and benefits needs to be the new normal as states are increasingly burdened with debt. It just makes no sense to continue for governments, (politicians) who are very short-term thinkers, to continue allowing this lose-lose outcome for the public, present and future citizens, in their nations, short-changing them massively while enriching a limited number of promoters….(often close to politicians for patronage).
“Mega investments are needed and investors have funds … taxpayers may not …. but that cannot allow a continued monopolisation and over exploitation of public goods like the sea, the seabed, the air and the wind.
“This is capitalism verging on new colonialism and countries like Malta cannot afford to fall for that trap yet again - we have too many examples of investors gaining so much and the public not sharing anything or very little. The colonial model needs to be seen for what it is at the start of Malta’s initial steps. Let’s promote proper values on public domain projects.”