MCESD chair: Malta’s construction industry is 20 years behind the average EU country

Malta is far behind the average European country in the quality and regulation of the construction industry, but a new economic vision can help give the country a needed boost and clarity to attract investment, talent and good reputation, according to MCESD chairman David Xuereb.

“We are 20 years behind the average European country when it comes to the quality and regulation of the construction industry,” Xuereb said in an interview with MaltaToday. “I’ve had offices in many parts of the world, from the UK to Belgium but also in Romania and Bulgaria. When I say this, I’m comparing to Romania and Bulgaria. We are 20 years behind them when it comes to ensuring that customers get the quality they deserve and the public is respected with professionalism.”  While the first courageous tangible steps have been taken by the BCA, this transformative process is very much in its beginnings.

Xuereb said the problem with Malta, today, is that there is generally no clear and compelling vision guiding efficient decision making and policy. He clarified the distinction between ‘economic vision’ and a ‘economic model’ many are pushing for.

“Economic vision reflects the long term aspirations of the citizens … what we wish to see Malta like in 2050. What do young people, the 11- and 12-year olds want Malta to look like in 2050 and how they will contribute to this economic transformation? This is the compelling vision we all need to get behind.  This is aspiration and defining this will be refreshing for many. An objective vision we all agree and this provides Purpose.”

He said that there is currently ambiguity in the country’s economic/social vision in the eyes of the social partners who remain confused.

“Social partners don’t know what Malta we’re aiming for in 2050. MCESD does not know what kind of Malta we are designing and aiming for in 2040 or 2050.  This is troubling.”

Meanwhile, an economic model is what Governments set out as a ‘blueprint’ to act in the short to medium term while reassuring that Malta can arrive at its vision.

“It’s about what actions and budgets you’re making today to enable us to achieve that vision over time. That model is very much up to the Governments and competing political parties.”

Xuereb said that the MCESD will be committing Malta’s best brains to collaborate, engage with all sectors of Maltese society and carve out the vision our nation aspires to.

“It’s a team of visionaries and professionals, who will inspire through trends and global inevitabilities while engaging will all sectors of our society to develop an economy that looks beyond gdp.  This process will assist politicians and policymakers understand and acknowledge what the people truly aspire while ensuring accountability to future generations.”

This group will research best-practices, understand what the people’s true concerns are, and propose solutions in an inclusive and compelling vision to address this. Decisions taken, according to Xuereb, should be truly and responsibly accountable to future generations.

“We want children to be involved, as they have every interest, have nothing to lose but are able to speak their mind and force the issues.”

Xuereb added this vision should not be driven by money alone, but also by environmental, social and governmental (ESG) values.

“How can we ever imagine us developing a healthy, competitive and productive economy if we do not take care of each other?” he said. “We have to take care of each other, take care of our physical and mental wellness, making sure there is equity and true gender representation also in leadership – not only in parliament but in all important social, economic, business decision making.”

“There are other minorities we need to consider in our decision-making process, not just gender and this to ensure equity, responsibility, fairness and the reality of our society today.”

Xuereb mentioned that one direction we know that Malta is committed to is to become carbon-neutral by 2050. “But there is a big mismatch between this positive objective and the real actions and decisions we’re taking today.”

“We should be panicking about the need to put serious focus on the energy performance of buildings and infrastructure. We should be transforming this industry today. But are we? No - we are really, really backwards.”

Xuereb said that the government should be taking certain obvious routes to short-circuit this transition. “For example buildings of a significant size should be conditioned with international sustainability standards like LEED or BREEAM, or at least identifying a date by when this will be a condition, .. now that would be a good idea. But this hasn’t happened yet. I know there have been discussions, but I want to see action.”

An energy mismatch

Last month, the MCESD held a meeting in the presence of the Prime Minister to discuss a recent spate of power cuts affecting key localities in Malta and Gozo.

“The starting position was a common position of distraught, disappointment, and uncertainty expressed by the social partners” Xuereb said.

Both the Government and the MCESD brought technical experts and engineers to the meeting to ensure a common understanding of the subject matter and the root causes.

“There were many facets to what we thought were the cause of the power cuts – it could have been climate change, population numbers, the increased quality of life of people, certainly the increased demand of everything electric today, including cars.”

“We knew there was a mismatch between a known change of population, distribution network, resources, increased temperatures, and our ability to plan for that. If there was a match, we wouldn’t have had this problem.”

Government told Social Partners that the mismatch was a result of increased demand, partly because of climate change, although social partners also pointed fingers at the type and number of people participating in the economy today.

“The discussion and recommendations do not exclude further power cuts during the hot summer season,” Xuereb said. “There were some weak points in the distribution system that failed. These have been repaired – we trust they’ve been repaired to a good standard.”

However, Government promised to accelerate the upgrading of the energy distribution system. “Money needs to be spent, but it’s also a question of manpower and resources to enable an upgrade at the rate that money can afford.”

Xuereb said there was considerable concern from social partners on poor planning, such as whether we are planning the development of the country in a coherent way and this coordinated with its various infrastructure. The other concern was health, and the hospitals’ ability to deal with potential power cuts and increased population demands.

Hope for wage recommendations before budget

Xuereb said that work is underway by the Low Wage Commission to draft recommendations on a new minimum wage.

“I am wishing to have this sorted before the next Budget. Our term is until the end of the year, but I’m trying to encourage proposals that could influence the next Budget.  We are conducting this exercise very professionally and collegially and this bodes well for a respectful and timely outcome.”

The commission was set up following a 2017 agreement between the government and social partners to increase the minimum wage.

The General Workers Union, Union Ħaddiema Maqgħudin, Confederation of Malta Trade Unions, and Forum Unions Maltin are representing workers’ interests on the commission. Employers are being represented by the Chamber of Commerce, Chamber of SMEs, the Malta Employers Association and the Malta Hotels and Restaurants Association.

The government is being represented on the commission by Godfrey Pirotta, Mark Borg, and Philip von Brockdorff.

As per the 2017 agreement, people earning a minimum wage are entitled to a mandatory €3 increase per week upon completion of the first year of employment with the same employer, and a further €3 weekly upon completion of the second year.

The agreement also stipulated that in 2018 and 2019, persons on the minimum wage will earn an extra €1 per week in addition to COLA.