Updated | Gozo tunnel toll income will not cover investment

Government to step in with millions to entice private investors for tunnel mega project

The Maltese government is considering stepping in and contributing millions in tax- payers’ cash to make up for the projected shortfall in toll fare revenues for the Gozo tunnel.

MaltaToday has been told that the private investment for the tunnel – a project which the Labour administration intends steaming ahead with despite the irreversible environmental toll it will bring – could hit the €300 million mark.

But financial experts have told the government that the volumes necessary to finance the toll income for the tunnel would not be substantial to recoup the investment.

Instead, the private investor can be expected to rake in insignificant revenues from toll charges that commuters will have to pay to cross from Malta to Gozo.

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Financial projections presented to ministers have shown that the toll charge will never come near to cover initial costs, the constant maintenance and operating costs necessary, or leave any profit to the massive investment.

Based on preliminary financials, the government has considered stepping in to subsidise the toll revenues – a contribution that would run into the millions – effectively showing the tunnel to be impossible without government assistance.

Final plans for the proposed underground and underwater tunnel to Gozo will be unveiled soon to coincide with the European parliamentary elections, precisely to entice Gozitan voters to embrace Joseph Muscat’s campaign.

Surveys published last Sunday in MaltaToday already indicate that the PN is suffering from lack of leadership in Gozo and the PL enjoys widespread support in what was traditionally a PN stronghold.

In a recent interview on TimesTalk, the former Labour MP Franco Mercieca – who is chairing a steering committee on the tunnel project – stated that he believed that the debate on whether Gozo and Malta should be connected by a tunnel was no longer necessary, and that the government is now at implementation stage.

The former MP said the conceptual design of the tunnel and plans for the approach roads will be published soon. “I can’t understand why the debate on the tunnel is happening now because this reached a climax 10 years ago and the decision has now been taken. We are at implementation stage.”

Mercieca said those opposing the project have suddenly realised that it is being implemented, insisting that support for the project was widespread.

A MaltaToday survey last November found there was overwhelming support for the tunnel project across Malta and Gozo.

The tunnel project is a commitment included in the Labour Party’s electoral manifesto of 2017. The project also enjoys the backing of the Nationalist Party.

‘Claims do not reflect government’s plans'

In a reaction, the government said that the claims did not reflect its true plans but stopped short of denying that it would be stepping in to sweeten the deal for investors.

“The work related to the planning and preparations for the implementation of this important investment started two and a half years ago and are proceeding well. The utmost attention is being given to such planning in order to ascertain that our country gets the maximum value from this investment.”

It said the tunnel would provide “the long-awaited” permanent link between Malta and Gozo, adding that the government was committed to delivering on the project for the benefit of the Gozitan community.

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