Thursday, 4 August 2011

MOD Presence, Transferred MOD Properties and Tendering

Undoubtedly one factor that the CM considers important, following the recently announced MOD Lands Deal, is the continued MOD presence In Gibraltar. It was vocalised by him in terms of both political and economic importance. There is no doubting that the presence of the MOD in Gibraltar is generally warmly welcomed. It will continue so to be. The repetition by the Defence Secretary of Gibraltar's continued strategic importance is also reassuring. It is this that requires our attention. The allusion to the tightness of money in the UK as well as the need for the UK to obtain value for money is less reassuring albeit understandable. In this context the emphasis on the political and economic importance of the MOD has other connotations, which require careful consideration to avoid unwanted repercussions.

Statements about the political importance of the MOD presence in Gibraltar should be measured and tempered. Gibraltar's continued British sovereignty should not be or be seen to be inextricably tied to that physical presence in Gibraltar. The British sovereignty of Gibraltar needs to be seen as separate and distinct from military requirements. The march of recent history has indicated one relentless destination. The MOD presence in Gibraltar, for a variety of reasons, has been reducing substantially. One day, for whatever reason, the presence will be negligible. What will remain always, however, is Gibraltar's strategic location. It is this advantage, together with the evolution and development of a social and political civil society, that is the negotiating strength of Gibraltar.  It is not a count of the number of MOD personnel physically located in Gibraltar that is any basis to interpret Gibraltar's international status.

The political argument ties in closely with the economic argument. Gibraltar is now (subject to prudent public expenditure and debt management) self-sufficient economically. We have economic self-sufficiency even  without MOD expenditure. This is not to say that MOD expenditure is not welcome. The ability of Gibraltar to remain British for so long as the people so wish, for it to remain a separate political unit and make progress toward self-determination, however, should not be intertwined with an MOD presence.

The ability to continue remaining a cohesive and separate political entity cannot be viewed as dependent at all on MOD use of Gibraltar. It is more directly related to Gibraltar's ability to retain a sustainable economy based on irreproachable business practices; practices that are acceptable and meet international and generally accepted standards and are not parasitical. It is of concern that, however much the boast of Gibraltar's good reputation is trumpeted by our politicians internationally, some such business practices do not meet these standards. Any shortcoming in standards makes our economy more susceptible. 

Public expenditure must be tempered by longer-term aspirations and needs. There is presently a tendency to be profligate with public moneys in the belief, hope and expectation that the economy will continue to perform as in the recent past. Expenditure is being incurred on luxuries at the expense of essentials. Gibraltar is not immune from the international financial and economic downturn. Accordingly, prioritising essentials is more and more necessary, precisely whilst the economy is performing well,. The urgency will increase if the economy is affected by the downturn in the world's economy and/or any attack on Gibraltar's core economic pillars, for example, presently, the potential for increased regulation of gambling in Europe, closely followed by taxation at the point of consumption, is of concern. 

One immediate economic impact is that the transfer of MOD lands carries a direct and indirect cost. The direct cost is that the Government is obliged to construct 90 houses for the MOD. The indirect cost is that accepting built and properties without buildings on them mean that there will be additional costs of security and maintenance. The Government have already announced that homes that are to be transferred will either be sold by tender or under the "right to buy" scheme, in order to raise money to meet the direct and indirect cost,in order to raise money to meet the direct and indirect cost. 

The question is, will sale of properties by tender provide the Government with the best return? It would be right to argue that in certain defined circumstances there are social as well as economic considerations that a government must have when disposing of housing. The issue does not relate to those houses where social considerations are more important than economic considerations. However, economic considerations have a major bearing when there is a direct cost to the Government, in the form of the construction, for the MOD, of 90 houses.

I am not convinced that selling houses by tender actually results in either the best price being obtained, or the process being entirely open and transparent. It is certainly the method that governments have for decades used to sell real estate in Gibraltar. That does not make it the right method. Perhaps, an open auction would deliver to the Government a better return. It may also prove to be a fairer and more open and transparent manner in which to sell houses. The Government would need to set a reserve price and then each person would bid openly for the house of his choice. The revenue to Government may increase substantially if sale of housing were to be done by auction.

Aside from housing, real estate of other description has been released to the Government by the MOD. Gibraltar's real estate assets, unless or until there is more reclamation, are limited and will be so even with reclamation. It is of the important that such land as is available and is suitable for economic activity should be utilised to its best potential. In this manner it will stimulate economic activity, increase employment opportunities and grow our GDP. I have no magic formula but I would urge that careful thought and planning go into what use each piece of real estate is put to and how it is sold. There is a need to make sure that it is all used to its best advantage and for the best economic benefit to Gibraltar. 

One huge asset that Gibraltar has is day tourism, via cruises and the frontier. It may be economically beneficial to consider using some of these newly transferred real estate assets to provide Gibraltar and them with additional attractions. This will entice these tourists to leave that extra bit of money in Gibraltar. US tourist destinations seem to be very good at achieving the expenditure by tourists of little tranches of money that fund employment and economic activity. It may be possible to learn from their experience and ability to enhance the tourist product.

So all in all the MOD Land Deal is good news. Now it is up to those who govern us to use the released properties to Gibraltar's best economic advantage. Frequently short-term answers or solutions are not the best way forward. Unfortunately electoral expediency and opportunism frequently deliver short-term answers and solutions with adverse longer-term repercussions. It is best for Gibraltar that acting in this short-term manner should be avoided.


  1. Robert

    Has the Opposition published its own plans for these newly acquired assets?

  2. Robert

    My point is that if the Government have already announced that homes that are to be transferred will either be sold by tender or under the "right to Buy" scheme then I would like to know what the Opposition propose doing with them.

  3. Anonymous at 19:29

    Ask the Opposition not me :)

  4. Robert

    All I asked was whether the Opposition has published its own plans for these newly acquired assets.

    Pardon me for breathing.

  5. Anonymous at 19:53

    Yes and all I have done is answer you to the best of my ability and as honestly as possible ... I do not have access to any party's views on anything unless it is published somewhere.

  6. Love your idea ref open auction. Limitations should also be imposed in my opinion, for example before anyone is allowed to enter the auction room, those persons should be vetted to ensure there is a real need for a 'home' and not simply an investment opportunity. Not sure on legalities, but as an idea, definitely worth considering as far as possible.

  7. L.E.F.says,

    I do not know if an auction would work or not.
    What I am sure is that the tender system and the allocation of Government rental flats needs a major shake up and revamp.

    We need transparency in the system so that when a worker of one of these goverment departments is successful in getting a tender, we the public can be assured that everything has been ,and more importantly seen to be, above board.

    We need transparency and accountability from those government employees in these departments ,whose relatives have been successful in getting a goverment rental flat, subsidized by us the public again, who everone knows has a house in Alcaidesa,Santa Margarita etc.

    What are we stupid or we just do not care.?

    What a shame when this happens in front of the Governments eyes and the honest Gibraltar feels let down by both the administration and the panzista Llanito.

    To end one question.

    Who is worse the person who has been allocated a flat fraudulently or the powers that appove these fraudulent actions?

  8. On the one hand, Government has built the new mid-town estate to boost its housing stock to meet the needs of the council housing list, and on the other, its selling its old stock, for a pittance.

    Would it just not have been more cost effective to keep the older blocks and sell off the new ones instead?

    The result is we have older families with brand new houses, paying a measly £120 rent, a month (on average), with a second house in Spain, and young families having to resort to buying their granny's house in Humphries, but in the interim having to rent privately whilst they wait for Granny to be claimed by either Mount Alvernia or the Grim Reaper himself (whichever comes soonest).

  9. the tender system awarded previous MOD real estate stock, Lynd House to someone who is allowing it to rot, perhaps in an attempt to justify pulling it down. Rock Cottage seems to be going in the same way too.

    These houses were supposed to be refurbished to their former glory and not pulled down to use the land for speculative reasons.

    Who were these houses awarded to, I wonder?

  10. How did No 6's PR machine no manage to spin the Time magazine article which damns Gibraltar's bunkering business as a catastrpohe waiting to happen. This would not have happened on Francis Cantos' watch. Either the ball has been fumbled or the Time article is accurate. Either way a very worrying and sobering scanario. Question: does Gibraltar really benefit from bunkering or do the profits all go to the operators. If the latter why do we have this business in our Bay?

  11. Anon@10:09

    Let's get our facts right, the article that you refer to was published in Le Monde and then translated and published online by WorldTime in partnership with WorldCrunch.

    Not quite the Time magazine, is it?

  12. Anonymous at 10:53

    Someone should tell GBC that. GBC seems to have got much of its reporting on that story wrong last night!

  13. Robert

    You state:-

    "some such business practices do not meet these standards. Any shortcoming in standards makes our economy more susceptible."

    Can you give me an example of a business practice that threatens our good reputation?

  14. Anonymous at 16:23

    Yes, over reliance by the public purse on revenue from one particular source: tobacco.

  15. RV@16:26


    @16:23 I asked whether you could give me an example of a business practice that threatens our good reputation not the public purse.

  16. "Can you give me an example of a business practice that threatens our good reputation?" Direct allocation of government development land and lucrative government contracts and consultancies. Lack of value for money checks and balances for government business contractors. Lack of controls on potentially dangerous bunkering activities. Obscure practices at the DPC. Lack of clarity as to ministers' business interests. Businesses going bust owing millions in PAYE and SI i.e. having been allowed to compete unfairly with bona fide businesses. Possible use of finance centre for money laundering. Employment of cheap labour (Gibraltar is the only place in southern Spain where (Spanish) staff do not speak English. Croneyism and nepotism. A bloated civil service which adds unnecessary bureaucracy to business. Sensitive commercial information as to government contracts and opportunities not controled to ensure an even playing field. Ministers involved in business.Government subsidising office developements to the detriment of private entities. Official boards and committees manned by favoured place men. 7 Days subsidised whilst other news papers have to eke out a living. Excessive borrowing and the use of the private sector as a cash cow (soon to be la vaca flaca) for the said bloated summer hour crap civil service. Lack of clarity re government policies and how to access official services and as RV says over relaince on revenue from tobacco (and gaming and land sales) and the neglect of the tourism produsct. Casi na.

  17. casi na indeed, pero aqui estamo muy bien!

    el mundo se va apique financially but we have money to spare.

    Perhaps we could loan Gemma some of our surplus to pay her workers and so put a stop to the frontier protests.

  18. Anonymous at 18:03

    Now you have it in full and from a third party commentator. It may teach you not to split hairs and not to persist.

    I was referring to the manner of sale of tobacco by certain retail outlets in government estates and near the frontier and the lack of application of the law ...

  19. Agree 1001 percent with 1805 above.

    POTENTIAL VOTERS would like to know how the GSLP-LIB, PDP OR GSD IF ELECTED intend to correct the disgusting undemocratic dictatorial and obvious observations raised at 1805.WHO WILL HAVE THE GUTS AND UNDERTAKE TO DO WHATS RIGHT FOR GIBRALTAR.



    Those in power and opposition should know the meaning of INTEGRITY AND PRINCIPLES, should the answer be yes, will they mention this in their manifesto commitment prior to the election.

    Integrity: What does this word mean? It means honesty. Trustworthiness. Reliability. It also means authenticity, openness, sincerity. At Snap-on, it means being true to these values... living these values. Every single day.

    Principles: What drives our performance? What is behind our success? Quality people, superior craftsmanship, top-notch service. That is our legacy. It'll endure only if we continue to play fair... do the right things... aim for the highest standards.

    Snap-on: Why such focus on integrity and principles? Because when you boil it down, all we have is our good name. That reputation is earned by applying sound values to everything we do. Integrity. Principles. Snap-on's commitment.


  21. ano at 18.52 says el mundo se va apique financially but we have money to spare. I nominate him for the title of Mr. Complacancy & Smarm 2011. Shurely there must be a way of officially recognising this kind of mentality - maybe a medal or Mayor's award or a statue at the entrance of the new airport under pass... que miedo!!!

  22. Tyrone Duarte:

    Roberto, I just got back from France and some of the press there is claiming that Monaco is heading for choppy waters because of excessive debt and the opaque origins of the cash in the banks there, particularly from Russia. They say that the Monagesques are seriously struggling, but not the tax residents. This may all be sour grapes of course from the writers, or from those not enjoying the boom, but regardless of this we may wish to take heed before it is too late, particular as some wish to emulate Monaco in Gibraltar.

  23. ano @ 19:02 mentira que es, vamo!

    is the world not going apique financially, and according to the CM, do we not have money to spare?

    si a ti no te da miedo de como va el mundo y lo tranquilamente que soltamo dinero aqui, then perhaps la medalla te la lleva tu!

    y hablando de un statue at the entrance to the new under pass, ante avra ke encontra a alguien que lo termine y una pila de millones mas pa pagarle.
    Alomejo el 'Consultant' se forara un poquito mas y encontrara a alguien pronto!

  24. Given some comments above who question what the oppositions position is on certain issues, can anyone tell me whether they actually have a position on anything at all?

  25. If I were the opposition, I would be holding my cards close to my chest at this point in time. It seems to me the Government is desperately tieing up loose ends to buy votes at whatever cost, and taking ideas from the opposition, as they have done plenty of times in the past, will only add to their list of things to do before calling the election and ending 'el desroche' currently taking place.

  26. Anon:22:16

    The Opposition seems to be more concerned with GC Patrol Boat spotting and criticising the Government for not acquiring the floating the military hardware that would enable the RGP to start a naval conflict.

    Oh! The Opposition's most recent action involved a protest to the UK about the 17 year old who was stopped from crossing the frontier with an ID card. They forgot to check the EU/Schengen rules on under 18s bearing ID cards instead of passports. That's just a minor embarrassment.

    Oh! The dust at Catalan Bay.

    You see? They do have a position on transcendental matters.

  27. Anon @ 22.16 hits the nail on the bonce. I do not think that we have ever had a more useless opposition in Gibraltar. The GSLP / Libs are already exhausted and do not give any indication of knowing how things are going in Gibraltar. The PDP is atrophied, it lacks the oxygen of imagination and until Nicky Cruz takes the wheel it is going no where. As Charlie Gomez has said many times the opposition parties are led by members of the barristocracy whose beady eyes are on the gravy train and have no real interest in anything else.

  28. Speaking of positions, what could be the reason for the sudden interest in security companies?

    Maybe a bit of foresight going on here as the Government considers CCTV in crime hotspots, not that we have any crime to worry about according to Wink. Businesses looking to be in the right place at the right time, perhaps?

    It would be a waste of money though if any tender was awarded to another bidder, if there's any other local company left to bid that is!

  29. have been trying to send my blog over the last to days could answer why it has not posted its heading starts with WHAT IS POLITICAL CORRUPTION
    every time i log into your llanito blog it starts with its December blogs

  30. Resident

    I do not know why you are having a problem ... try refreshing the page,which you can do by clicking on the title also, but I log on to my August posts without a problem.

  31. Anon@08:36

    The Opposition hold their collective cards so close to their collective chests that nobody knows what it stands for.

    Oh! I forgot they stand for "socialism" and "the workers", whatever that is supposed to mean.

  32. Anon @ 11:51
    Doesn't surprise me in the least, you wouldn't know what socialism & workers meant in a million years!

  33. I wonder whether the oppo is just too comfortable with its easy anti- Caruana discourse and have nothing else to say. Problem is that the opposition MPs draw salaries for doing nothing and saying nothing of particular interest or depth.What does surprise me is the lack of zest of the PDP.

  34. Just how much do MPs earn now? I estimate it's close to £100,000 for an MP (close to £140,000 for the CM - more or less the same as David Cameron) and close to £50,000 for an Opposition MP. Does anyone have the latest figures?

  35. Money down the drain hay mas pagas muertas en "Parliament" que en culaquier otro lado.

  36. have read all the above posts with interest.

    For those of you that think that Gibraltar is immune to the worlds financial woes, you scare me ( or at least the fact that you may be a policy maker and cannot see as far as your own nose scares me ). . . .

    I currently work for one of the major players in world finance, and for the last 3 years, the personal advice to us from people who earn a living from reading trends has been the same. Get out of debt, as quickly and responsibly as possible.

    Advice my fellow blog readers, I recommend you ALL follow, while you still have the ability to do so in Gibraltar.

  37. What I want to know is what the GOVERNMENT have planned, after all they take the decisions that affect us and not the opposition.

    I note anon @ 10:42's comment and, as we all know who's behind this move, one can only reach the conclusion that more cronyism is in the pipe-line.

    Over the last 16 years, the rich and connected seem to have become extremely richer still, in recent years, blatantly so. The dishing out of contracts lately is mind-blowing and quite disgusting.

    Its almost as if everything is being put into place before the election is called just in case the GSD does not get in, at least the contracts will ensure the gains remain with the chosen few.

  38. Tyronr Duarte says:

    Anon 19:47, don't worry! Ya menearan mas container de tabacco pa pagar por todo! Si no el FCO no hacen como a Turks and Caicos y todo ta tranquilo.

    Es que manda huevo lo ke tiene ke ta viendo uno. I don't work for a mayor financial institution, but the talk here in the UK is of Italy going bust. To top it all off we are likely to end up with the kind attentions of the PP again. The financial risk we are at is quickly going to translate to political risk- y nos van a tener cogio por los cojones.

  39. Tyrone, it wouldn't surprise me in the least if that was the intention all along, to place us in a position where by UK is not interested in bailing us out and Spain is more than happy to assist.

    Por los cojones y el cuello!

  40. The problem with the opposition is that the Government has been hellbent in doing much of what the opposition has set out in previous manifestos whether because they have been good ideas or whether they feel that by doing all the things the opposition say that they will do, they limit their ideas or policies in the future. If the opposition would state what they would do with the MOD properties you can bet that the government would use the opposition ideas as if they were their own and score political points. This would be true even if the opposition were the government and visa versa. Personally I think that the government should not plan on doing anything with the newly acquired properties, call an election and then the next government be it the GSD or the GSLP may then sensibly ponder on the best use for the properties. There is so much more than can be done with them than just flogging them off for a pretty penny to decrease debt! Election time is desperately needed so that the future 4 years may start evolving be it with whoever.

  41. Anon 19:37. Expect nothing less and more of the sane from the likes of cornflakes. They are truly desperate to paint any picture that discredits the GSD. Funny, cornflakes wants to do away with gangsters. Ai mi Gibraltar adonde esta?