MEPA U-turn: authority to ‘bill’ government instead of subvention

Past declarations by government and MEPA that the new, higher development fees will ensure the authority fully finances itself have been put paid by a decision to have MEPA “bill” the government for its services: a roundabout way to receive a subvention from the state.

In the budget speech for 2010, finance minister Tonio Fenech announced that “a new tariff system will come in place and this will mean that the authority will no longer receive a subvention.”

And last January, MEPA chairman Austin Walker told MaltaToday in an interview that the new tariff regime was necessary “to eliminate the €6 million paid by the taxpayer to finance MEPA… we had no choice but to increase the tariffs.”

The new system through which MEPA will bill government for its services was announced by parliamentary secretary Mario de Marco in an interview with MaltaToday.

De Marco was asked whyMEPA’s latest financial estimates for 2011 show the government spending €7.7 million to finance the gap in MEPA’s accounts, despite government’s commitment to turn MEPA in to a self sustaining authority.

This amount is even higher than the €7 million subvention granted to MEPA in 2010 which still left the authority with a €2 million deficit.

De Marcoinsists that no government subvention will be paid in 2011, but the government “revisited” the concept of a self-sustaining authority, distinguishing between the planning and development side of MEPA which should be self-financed through tariffs; and those other aspects of MEPA’s work through which it renders a service to government and consequently is of national interest.

“There is a realisation that there is a lot of work which MEPA is doing for government.  This includes most of the work which the Environment Protection Directorate and Forward Planning unit are doing,” de Marco said.

So rather than increase the tariffs in a more substantial way MEPA will be
recovering from government the cost for the services rendered to it.

De Marco has refused claims that this is the same as giving a blank cheque to MEPA. “Before, government used to give MEPA a blanket subvention without distinction of its use. Government was previously subsidising also the planning and development function of MEPA, which is rendered primarily to the private sector. This is no longer the case.”