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Financial questions surrounding new power station
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The new power station will cost the massive amount of £123 Million pounds. A couple of issues stem from that, says the PDP.
*Firstly the Government should have taken the decision to conduct an investment programme into this area some years ago. If it had done so, presumably, the project could have been delivered for a lower price because the extent of present investment might not have been necessary.
*Secondly the expenditure towards a new power station was not one of the projects listed by the Chief Minister at Budget time when he provided the main list of projects which would incur capital expenditure during this financial year.
The Government spent approximately £440,000 on this project last year. As such it is unclear how this expenditure of £123 Million is being programmed within the Government’s financial plans and whether it will affect the Government’s forecast of debt.
The Government should make clear whether the award of this tender will affect the forecast it made at budget time that “net public debt will finish this year at £180 Million”[18.7% of GDP] or that “thereafter it is expected to peak at around 23% of GDP.”
The party adds that people are entitled to know whether this new project will affect those financial forecasts. Especially given that it has been a long-standing criticism by the PDP that the Government should prioritise essential infrastructure investment [roads, electricity etc] and social projects [housing, social services, environment and health] over the investment it is directing to the airport project.
As for the new power station itself the PDP believes the building of the new facility is crucial to the future development of Gibraltar as a whole and should have been prioritised many years ago. It is clear that the building of residential and commercial developments requires investment in support services like electricity, sewage and transport. The increase in built area and larger demands of private sector businesses in recent years has placed a strain on the current electricity grid.
Instead Gibraltar has suffered the pollution from our old and failing power plants, the regular but unplanned power cuts that have cost local businesses dearly and inconvenienced the public hugely and, more recently, in order to put a patch on this, the extra expense of renting skid generators to see us through until the new plant is operational.
“We welcome the new power station and the decommissioning of the old MOD and Waterport stations with the reduction in pollution and power cuts this will mean. The PDP feels this project has not been given the previous importance it deserved and can only put this down to poor planning on the part of the Government. Good planning would ensure that side by side with building developments other supporting services are planned such as sewers, roads, green areas, playparks, schools, retail facilities and parking. We are concerned however as to the impact of this project on the state of public finances and the Government should clarify how this will affect the debt forecast it announced earlier this year,” said spokesperson Gigi Sene.
31-03-11
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