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GIBRALTARINTERNATIONAL

F I N ANC E AND BUS I N ESS

p6 New Local Bank Feb/March/April 2010p26 Pensions

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The Bland Groupcelebrates its 200thanniversary

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Confidence andopportunity in 2010

EDITORIAL COMMENT

“If we forever lookback, we will neversee the way ahead”,as I tell everyonewhen they declare

2009 a terrible year!For in 2010, Gibraltar is

looking forward to the end of highcorporation tax, this being the lastyear of paying 22 per cent.

From next January, the rate should be cut to 10 percent for all businesses based on the Rock, if the EuropeanCourt of Justice throws out the Spanish appeal againstGibraltar having its own tax system separate from the UK.The government is certain it will happen.

It’s encouraging too that – in these days of ‘tight’money availability – institutional and private investors arethis year prepared to put significant money into buildingnew offices on The Rock to satisfy the demand thateveryone expects to follow from new businesses attractedby the low corporation tax.

Not many other jurisdictions can boast such aconstruction display of confidence.

And local investors too this year seem prepared toback Gibraltar in its drive to create a new, national bank,sympathetic to the needs of small business in particular,and less well-heeled residents who find it difficult to gainmortgages.

That’s quite different to most other places, wherepeople fight shy of involvement with banks. Soundlybased, as it must be to meet strict local regulatoryconditions, a new Gibraltar bank is certain to be popular.

The people of Gibraltar have much to be proudabout, given the success of Kaiane Aldorino in translatingher new Miss Gibraltar title into Miss World. It’s notbeen done before and everyone thinks she will be a greatambassador.

One obvious potential benefit is in giving tourism aboost, but is anyone planning to turn it to advantage - isthere a mini-exhibition stand travelling with her,brochures, posters, etc. And what about Gibraltar airportand the Border: will there be signs proclaiming “Welcometo Gibraltar, home of Miss World”? Opportunities likethis seldom arise.

This year will see just how popular the new ferryservice between Gibraltar and Algeciras is after a gap ofmore than 40 years. The operator believes it will sparkinterest in a Morocco / Ceuta ferry link with Gibraltartoo, which would be a practical demonstration of goodrelations with Spain.

The enthusiasm now being shown in La Linea todevelop the Spanish side of the new Gibraltar airportterminal – albeit in part fuelled by the need to create freshemployment and investment in the area – is perhaps themost far-reaching sign of a good year ahead.

As we enter the second decade of the 21st century, thefuture for business in Gibraltar looks exceptionally bright.

NEWS P6-10New local bank plannedBanking expandsFive go beforeNew projects to create jobsGDP growth successNetwork of Bay ferry services

TELECOMMUNICATIONS P12More secure internet connectionsGibtel opens new routes

FUNDS P14A new home in Gibraltar

PROPERTY P16-18Office space set to doubleA 2020 vision

PROFILE P20-23James Gaggero, Still flying high

DATA PROTECTION P24-25Maintaining principles!

INVESTMENT P26-27Revenue lifts 55% tax threatHelping hand for new businessSatisfying appetites

PEOPLE AND PLACES P28-29

LAST WORD P31Spathetic!

February/March/April 2010 Volume 16 / Number 1

Published by GibraltarInternational Publications Ltd.1/5 Irish Town, Icom House, Suite 6/PMB 104PO Box 561, Gibraltar

EditorRay [email protected]

SalesC.A. [email protected]

DesignBil [email protected]

UK Agent: Tel: 0044 (0) 1993 703560

Contents

No part of this publicationmay be reproduced withoutthe written permission of thepublishers. The publishershave tried to ensure that allinformation is accurate, butemphasise that they cannotaccept responsibility for anyerrors or omissions. Thepublishers accept noresponsibility for statementsmade by contributors or forany claim made in anadvertisement.

Gibraltar InternationalMagazine is available onsubscription, 4 issues postedto: UK £24 - EU £32 - Rest of World £44.

© 2010 Gibraltar InternationalPublications Ltd.

GIBRALTAR INTERNATIONAL MAGAZINE

ago revealed their plan jointlyto establish a Gibraltar-basedBank under the name, Close& Marrache. It was expectedto be trading by early summer

2008. It was seen as “a per-fect strategic fit” comple-menting operations in Jersey,Guernsey, Isle of Man andSouth Africa.

NEWS


The idea has been promptedby the current difficultiesbeing experienced by localpredominantly small busi-nesses to arrange overdraftsto help with short term cashflow issues, and reasonablypriced loans for start-up andexpansion projects.

Similarly, residents arefinding it tough to find mort-gages to enable them to takeadvantage of government sub-

sidised housing schemes, par-ticularly the new sitting ten-ant right-to-buy homes at upto a third of the true marketprice.

Reportedly, main bankswith local offices are fallingfoul of policies set by headoffices elsewhere in the UK.They see mortgages, typicallyof £30-40,000, with little orno prospective of owner con-tribution, either as being too

Geneva-based Banque Audi(Suisse), a private bankingsubsidiary of one ofLebanon’s largest banks, is toopen a Gibraltar office thisSpring having gained a licencefrom the Financial ServicesCommission.

The move comes as twoothers - King & Co a privatefamily banking operation inLondon and Close Brothers,the UK’s largest independentmerchant bank – are awaitingthe outcome of their licenceapplications submitted morethan two years ago.

Banque Audi (Suisse)offers independent advisoryservices to clients on all typesof securities and provides itscustomers with both assetprotection and asset enhance-ment, dealing in equities,bonds, mutual funds, deriva-tives, precious metals, foreign

exchange and structuredproducts.

Raymond Joubaud, a for-mer General Manager of TheGibraltar Private BankLimited (now Lombard OdierDarier Hentsch Private BankLimited), is believed to beleading the venture.

His firm, Velay FinancialServices, providing fundadministration and invest-ment management supportservices, was established atMarina Bay in 1998 andJoubaud is a founding mem-ber of The GibraltarAssociation of Stockbrokersand Investment Managers.

The FSC approval forBanque Audi comes at a timewhen banking internationallyis under the greatest scrutiny.

Close Brothers andGibraltar-based law firm,Marrache & Co, two years

in total, and the governmentis thought to be consideringtaking a stake of up to 40 percent in the project.

Rather than provide freshcash, this may involve the newventure absorbing the State-owned Gibraltar SavingsBank, where individuals’deposits are guaranteed by thegovernment. Or the newbank may provide the bank-ing facility for the SavingsBank.

Local people would beencouraged to save with the

Bank earning higher rates ofinterest than generally avail-able, with an option to utilisePost Office Counters.

Local controlThe amount required tofinance the new bank dependson how broad its activitieswill be, and one possibilityunder discussion is a stagedopening, perhaps tacklingfirst either business loans ormortgages.

But the Bank’s destinyand lending decisions would

be controlled and managed byprofessionals independent ofgovernment, which essentiallyis acting as a catalyst.

As such, the venture isexpected to be hugely popularwith residents. It is understoodby Gibraltar International thatthe Bank would be more “sym-pathetic” to the local marketthan the international banksoperating on The Rock.

One concern is that thenew Bank must not become sopopular that it causes any ofthe others - NatWest, Barclays

or the Danish Jyske Bank - topull out; some bankers arethought to be “nervous”about the project, fearing“unfair competition”.

David Parody, theFinancial Services Commissionchief executive officer, lastAutumn predicted at theFinance Centre Council 2015conference, that “there isroom for another player ortwo in the retail banking sector” which, he felt, was “under-represented” inGibraltar.

NEWS

Five new and on-going invest-ment projects – three largeand two smaller ones – thatwould create many jobs inGibraltar are being workedon by the Bland Group forlaunch this year, the 200thanniversary of the business.

They will form part of anon-going programme byChairman James Gaggero, toreplace the economic activityof GB Airways (GBA) – whichhad £300m turnover and £6mprofit a year – that Bland soldin early 2008 to easyJet for£103m.

The Group still has over£100m cash available toinvest in projects that achieveequivalent or better results,but with less risk, he revealedin an exclusive interview withGibraltar International, (seeProfile, page 20).

“Airlines are, on the spec-trum of risk, almost off thescale. We aim to diminish ourexposure to risk, diversifyingthe spread of economic activi-ties we partake in as well astheir geographic locations”,Gaggero explained.

“The three major projectsin Gibraltar are of real inter-est to me”, he declared andadded: “They are exciting andwill show the level of commit-

ment we have for Gibraltar”. The privately owned fam-

ily firm has 16 companiesoperating in Morocco, Spain,the UK and Gibraltar, wherethe firm originated and theGaggero family has beeninvolved since the 1860s.

Fifty years old JamesGaggero is coy about reveal-ing financial details of thebusiness, but says there arearound 740 employees now –in GBA previously it had1,000 staff – and almost 160are in Gibraltar, whichpresently accounts for round-ly 20 per cent of Group activity.

Local Bland Group inter-ests include the iconic 104-bedroom Rock Hotel, whichis one of the on-going proj-ects, where rebuilding or relo-cation of the 78 years-old

hotel is hoped to be agreedearly this year, along with oneof the planned undisclosednew ventures.

The Group also operatesBland Travel tour coaches andAvis car hire in Spain andGibraltar, and its GibAir haslong held the ground handlingcontract at Gibraltar Airport.Media company Colorworksand ABG, the Forex web serv-ice FX500, both joined theGroup in 2008 and are alsobased in Gibraltar.

Timing of the new ven-tures depends on a number ofissues. “Gibraltar is not with-out its challenges in that a lotof things have to be clearedbefore major progress can bemade – with government,business partners, politics anda wide range of prerequisiteshave to be met – which makes

it slightly less straightforwardthan elsewhere”, he said.

Gaggero added: “I’velearned through experiencethat deals are never done untilthey’re done.” For the future,he says: “We will hold backsufficient cash to meet theneeds of the Group so that weare never dependent on thirdparties, but it is envisaged thatthe vast majority – 70-80 percent –will be channeled intoinvestments and businessesthat we will operate.

“We are disciplined, dili-gent and hard working andfortunate to have theresources to see us throughthese testing times: the combi-nation of those, mixed in withpassionate committed man-agement and staff with goodproducts and companies,hopefully, a recipe for a suc-cessful future. Only time willtell”.

In December, BlandGroup agreed in principle a£14m joint venture withStagecoach for a hovercraftservice across Firth of Forth toEdinburgh that involves Blandbuilding two large passengercraft and Stagecoach con-tributing two coach depotsand operations, subject toplanning consents.


Bland new projects to “create many jobs”

Banking expands

risky in today’s economic cli-mate, or too small to makethe administration worth-while.

The commercial ratesbeing demanded - typically5.5% over 20-25 years formortgages of under £100,000- are generally not too highfor government housing ten-ants, but banks are said to befurther worried about becom-ing involved in blocks that are

part social and part privatehousing.

Local businesses are alsosaid to be suffering, despitethe fact that the Gibraltareconomy is growing by atleast 6 per cent (see GDPgrowth success, page 8)Typical business loans by thenew bank would be up to£10,000.

In November, ChiefMinister Peter Caruana,revealed that “theGovernment continues toactively study the desirability,viability and feasibility of anew locally owned Bank” aspart of projects foreseen in thenext two years.

Finance promisedThe new Gibraltar bank - noname has yet been proposed -is already understood to haveattracted local investors pre-pared to deposit some £25m

Five go before!If the new Gibraltar Bank goes ahead, it will not be the firstnational bank on The Rock.

In mid-1987, George S Moore, the now deceased formerchairman of one of the world’s biggest banks - the FirstNational City Bank of New York (later known as Citibank) -set up Gibraltar Trust Bank (GTB) as a joint venture withCredit Suisse.

By then resident mostly in Spain, Moore recruited JoeGaggero, the now president of Gibraltar’s Bland Group, as alocal director. GTB became Credit Suisse (Gibraltar) in 1991and a wholly owned subsidiary of the Swiss bank.

Gibraltar’s first bank was the Genoese family ownedGalliano’s Bank (GB) in 1855. After three decades, it facedincreasing competition - initially from Anglo-Egyptian Bank(later Barclays) and Credit Foncier (later Crédit Agricole). GBdid not incorporate until 1978 and nine years later wasacquired by Jyske Bank.

By 1900 there were four other small, family-ownedbanks - Cuby Brothers, Benzecry (El Banquerito), RugeroniBrothers, and Marrache and Sons - but all had ceased operations before World War II.

New local bankto ease funding An independent feasibility report has been prepared for government to establish a Gibraltar Bank dedicated to localresidents and small businesses during this year, Editor, Ray Spencer has discovered.

late a further 5 per cent a yeargrowth until 2012. Thatwould mean the economythen would have nearly tre-bled in just 15 years, a per-formance he considered “isvery likely to be exceeded”.

On top of that, now thereare over 7,500 more Gibraltarjobs than in 1996, represent-ing an increase of 58 per cent.Caruana predicts it will growfurther during 2010.

Gibraltar’s robust GDPand employment growth inpart is the result of a well-diversified economy, and theoverall £15m budget surplusfor the last financial yearcompares to a forecast a£19m for the current year.

Expected total borrowingof £350m in the period toend-March 2010 is more than80 per cent greater, althougha rise of £105m in reserves toreach £234 million provides asignificant off-set.

Net public debt shouldthen have risen by 86 per centfrom £62.2m (or 7.3 per centof GDP) in 2009, to reach£115.8m (or 12.9 per cent ofGDP) in 2010.

A very good yearIn his New Year message,Caruana declared: “Despitethe economic and financialcrisis that has continued togrip the world during 2009, ithas been a very good year forGibraltar, not least economi-cally, as we have mostlyavoided the consequences ofthe downturn.”

With no capital gains tax,inheritance tax, or VAT, theappeal to business of the juris-diction will be even greatergiven the move from the pres-ent 22 per cent CorporationTax to a flat rate of 10 per

cent from next January.The move follows success

in the European Court ofJustice (ECJ), which last yearreaffirmed Gibraltar’s free-dom to have its own tax system, separate and different to the UK. That is something Caruana regards as“absolutely essential to ourcontinued economic, and thussocial and political, viabilityas a small country”.

But Spain, and separately,the European Commission ondifferent material selectivitygrounds, have appealed thejudgment.

Caruana is confident of asuccessful outcome, but theECJ has not yet set a date forthe oral hearings and the finalruling.

Both the GibraltarGovernment and UK govern-ment are resisting the appealsand filed separate submis-sions.

Caruana also is con-cerned that the large G20countries may seek to‘encourage’ low tax countriesto cease this form of competi-tion that stands to reducenational revenues.

Unified EU taxesAccording to EurActiv, a UK-based information and com-munication concern, policyexperts advising the EuropeanParliament (EP) in a ‘World in2025’ document released qui-etly at the turn of the year, arepressing for deeper integra-tion of European economiesand potentially closer ties ondirect taxes.

In particular, unified corporate tax rates are set outas an objective by the

Gibraltar has been placedfifth in a list of the most stableand prosperous countries inthe world, according to a win-ter report by Jane’sInformation Services.

After a one year investi-gation and analysis of 235countries, Jane’s – more usu-ally associated with militaryresearch – placed the UK at7th, Switzerland at 17th andthe US 22nd!

Jane’s system differs fromgovernment assessments ofcountry risk, because it isbased on objective analysis,“with no politicisation of theintelligence”. Under the rat-ing system, each nation’spolitical structures, social andeconomic trends, military andsecurity risks and externalrelations were taken intoaccount.

Only the Vatican,Sweden, Luxembourg andMonaco were placed ahead ofGibraltar.

Continued GPDgrowthGibraltar’s economic worthconservatively should havereached at least £900m a yearby end-March if Governmentforecasts are correct, the terri-tory having experienced ayear-on-year growth in GrossDomestic Product (GDP) of 5per cent or more.

That experience is inmarked contrast to almost

every other European countrywhere tiny or negative GDPincreases are being recorded.

Once inflation is takeninto account, the real growthin Gibraltar’s GDP last yearwas around 3.5 per cent.Given that inflation remainedsteady at 2.8 per cent accord-ing to the latest figures to end-October, the real 2009/2010figure will most likely beslightly above 2 per cent.

Closer monitoringThe Government has beenkeen to monitor closely eco-nomic indicators, and most ofthose covering its income –PAYE, social insurance andduty – are being analysedmonthly rather than quarterlyas previously, the first twoalso providing pointers to thestate of employment.

Company tax – forecastto be £26m this year, upslightly from an expected£25.8m in 2008/9 - and gam-ing receipts however, arereported at the varying finan-cial year ends of businessesand can only be accuratelyassessed over a longer period.

Peter Caruana, Gibraltar’sChief Minister, said inNovember that “it is a measure of the extraordinarysuccess of our economy that ithas grown by 145 per centsince 1996” - an average ofover 11 per cent a year.

He went on to extrapo-

EU tax harmonization prospectclouds GDP growth success

NEWS


Gibraltar is preparing for new challenges over company tax and theproposed imminent new low 10% rateis still not fully secure, writes editor,Ray Spencer in a 2010 review of theeconomy.

Continued P10

Price correct as at 11 January 2010. For travel from 22 January to 23 March 2010. Variable charges for hold baggage apply and some payment methods attract a handling fee. See website for details.

The only airline that flies from Gibraltar to Gatwick.

Home from home!

said Oliver. A new ferry ter-minal is being built atAlgeciras only minutes fromthe town centre, but initialservices use the old port terminal.

The service is being pro-moted through travel agenciesand hotels along the Costa delSol and in Gibraltar to attracttourists with tickets costingaround d5, “although work-ers using the early and lateservice will pay d3 each way -about the same as for buses,but in half the time.”

Economic substanceJoe Holliday, Gibraltar’sMinister for the Port, told alaunch reception that overrecent years he had beenapproached by several other

potential operators interestedin the route, but theTranscoma project was theonly one “to have economicsubstance”.

Both he and Spain’s director general for Europeand North America at theSpanish Foreign Ministry,Luis Felipe Fernandez de la Peña, emphasised that the fery was a practical demonstration of the outcomeof the Tripartite Talks involv-ing Spain, Britain andGibraltar.

A Spanish ForeignMinistry statement noted“Spain is confident that thisexample of local co-operationserves (as is the objective ofthe forum) to favour econom-ic and social development inGibraltar and the Campo.”

Planning for network of Bay services

NEWS


With a schedule of five week-day roundtrip services eachday and three at weekends,the 150-seat Punta Europa IIcatamaran has the capacity toferry 500,000 passengers ayear.

But its owners expect toaverage around 60 per centloading overall if they are tosatisfy the business plan.

Having started just aheadof Christmas - later than orig-inally planned because ofadministrative problems ateither end - services were sus-pended through bad weatherover the holiday period.

But Enrique Oliver,Transcoma’s general manager,told Gibraltar Internationalthat the firm was “confident”about meeting its financialtarget.

“We have been planningthis for some time and expect,if all goes well, to extend theferry route to Morocco andCeuta using a larger craft”, herevealed.

The firm aspires to a net-work of metropolitan ferryservices in the Bay ofGibraltar.

New terminalThe Group, comprising 35companies in shipping andtransportation, was operatingat 35 per cent below budgetas a result of the world eco-nomic recession, he said, butthe Gibraltar ferry link wasone of a handful of new proj-ects to which Transcoma wascommitted.

“When we decide to gowith something, we do it”,

Ferry links to Tangier and Ceuta from Gibraltar could be launchedearly next year if the take-up of initial services to Algeciras isencouraging, says Transcoma, the Spanish transport conglomerate, which has invested d2m in the initial project.

policy team.Significantly, European

leaders told Ireland last yearthat the new Lisbon Treatywould not affect its relativelylow corporate tax regime.

But now EP advisors seethe world economic crisis asoffering “a window of oppor-tunity” to bring about taxunity.

Right to competeIn a recent interview, Caruanatold the Financial Times thatGibraltar, like Ireland, had theright to compete with other

countries and financial cen-tres on the basis of low taxrates.

“Most of the new EUmember states have very lowtaxes, much lower than 10per cent ... there is low taxthroughout the EU andGibraltar is simply mimickingthat mode”, he reportedlysaid.

And the Chief Ministerhas also held out the prospectof lower personal taxes alongside lower businesstaxes.

In the meantime, 17 Tax Information ExchangeAgreements have been signed

with Gibraltar, although sofar only one has been imple-mented.

Several small countrieswith little or no connectionwith Gibraltar have signed –including New Zealand,Faroes Islands and Finland,for example – but significant-ly several large countries arealso listed such as France,Portugal, Germany andIreland, as well as the US andUK.

More openTo ensure greater transparen-cy and openness in govern-ment, Caruana committed

last June to begin publicationthis year of a new annualreport dedicated to the publi-cation of a range of new eco-nomic and public finance sta-tistics.

Although technically inthe public domain, they arenot available in an easilyreferable form.

He expected to be “pub-lishing shortly the list of sta-tistics that will be included inthis new publication that willbe known as the “NationalEconomic Statistics”.

However, as of Januaryno progress had been made inthis area.

EU tax harmonisation from P8

Much increased internetbandwidth has beenintroduced by SapphireNetworks, an independ-ent Gibraltar telecommu-

nications company, between The Rock,La Linea and Madrid as part of moves toencourage more e-gaming companies tomove their main computer servers andassociated equipment to the jurisdiction.

And this year the firm will be in aposition to offer consumers Voice OverInternet Protocol (VOIP) facilities andland lines at cheaper prices, having tiedup agreements with Gibtelecom - itsnational competitor - for open access toits network, as has happened in the UKand elsewhere.

For its core business offering, howev-er, Sapphire has linked with “global com-panies offering world-class standards,despite being only a small jurisdiction”,explained managing director, LawrenceIsola. “In a few years we have become aleading provider of high-availabilityinternet services on the Rock”, he maintained.

Operating profitablyThe firm has invested £8m over fouryears on developing and enhancing itsservice, aimed primarily at e-gaming andfinancial services companies requiringhigh speed, secure internet services. Isolasays that since July 2008, Sapphire hasbeen operating profitably.

In Gibraltar’s first live internet pres-entation to reach gaming companiesunable to visit the Rock, Sapphirerevealed how it has further enhanced itsnetwork by providing a second presencein Spain as back-up to avoid a singlepoint of failure.

“The presentation itself was attend-ed by 20 existing and potential compa-nies, whose technical teams are in placessuch as Israel and the UK, so it wasimportant that they could all participate”, explained Isola.

“Gibraltar is relatively expensive

compared to the UK and other Europeanareas for bandwidth, so we aim to max-imise value by providing the highest stan-dards of service quality and reliability”,he added.

“We also invited companies that weare trying to attract to Gibraltar or whichwe think should be interested in estab-lishing a presence here”.

Sapphire has increased tenfold itsown network capacity between Gibraltarand Madrid to reach 7.5 Gbps - arounddouble that of anything available else-where on The Rock, claims Isola.

Access to 30,000 ISPsThe firm has introduced ‘virtual’ connec-tions between London, Amsterdam andits Madrid node, to give Sapphire a pres-ence closer to its customers and access to30,000 internet service providers.

A Gibraltar-based gaming companywith clients in England and northernEurope, for example, will see a realimprovement in service - a speedier andmore efficient connectivity less likely tosuffer ‘packet loss’ (which can cost com-panies thousands of pounds of business),because under Sapphire’s new link thereare fewer routing nodes.

Over £6m has been invested in satis-fying ‘high end’ corporate businesses,including completion of a 10km fibre-


Gaining more secure and highercapacity internet connections

optic cable ring around The Rock and a6.5km link through the frontier to Spain.

Sapphire has also become a certifiedoutsource supplier of Verizon, one of thelargest US telecommunications compa-nies big in banking networks, and former50 per cent owner of Gibtelecom.

At the same time Sapphire has intro-duced an ‘event bursting’ facility to pro-vide gaming companies temporarily withmore than eight times their contractedbandwidth capacity. This can be forevents such as the Grand National,World Cup and Ryder Cup, or to provide‘emergency’ extra capacity should anoth-er supplier suffer an ‘outage’, or even giveextra capacity to speed up data replica-tion between Gibraltar and another site.

New loyalty discounts provide serv-ice cost savings of up to 10 per cent pro-gressively from 18 months to three years.

Gibtel opensnew routesAt the same time, Gibtelecom - 50 percent owned by the Government andTelecom Slovenia - is stepping up thecompetition for internet hungry business clients.

It is investing £18.5m as its contri-bution to a 13-country joint venturethat will see a fibre-optic cable linkingEurope with India to open a newtelecommunications route forGibraltar that does not depend oncrossing into Spain.

The result will be to giveGibtelecom greater flexibility andsecurity of connection from later thisyear and availability of a higher netband width for its customers.

And it has also just completed anew link between Madrid andGibraltar, constructed under contractby Interoute, that complementsGibtelecom’s existing internationalroutes, including via Telefonica andCable & Wireless to give “virtuallyunlimited capacity to support furthergrowth”.

Local investment is growing to ensure business can beattracted and their future needs are satisfied.

Internet exchanges in London and Amsterdam addto internet and leased line services out of Madrid

TELECOMMUNICATIONS

Initially at least, there was considerable anger and frustrationthat the European Commission’sdraft Directive on AlternativeInvestment Fund Managers (AIFM)

had been prepared with little or no industry consultation.

The Directive affects not only theEuropean hedge fund industry, but alsoprivate equity and other sectors includingreal estate investment products.

In a recent public hearing before theEU Economics and Monetary Affairs(ECON) Committee, Gerben Everts,head of Dutch pension manager APG’sglobal regulations and compliance, wasvery direct in pointing out that “if it isindeed the intention of the Directive toincrease transparency on the alternativeasset management industry, why do you,honourable members, accept the regula-tory process to take place in the dark?”

But changes to the draft Directivemean that Gibraltar still stands to bene-fit, but possibly less so, in some areas.

Initially, it was intended to restrictAlternative Investment Funds not domi-ciled in the EU being marketed or sold toany professional investors (as defined byMiFID) unless a series of strict conditionswere met. The benefit for Gibraltar wasobvious as a jurisdiction offering aEuropean entry point for many Non-EUcollective investment vehicles.

However, a series of (138) amend-ments proposed by Jean-Paul Gauzès,rapporteur for the European Parliament’sCommittee on Economic and MonetaryAffairs, has substantially amended thisprovision.

Now it is suggested that institutionalinvestors should be able to choose wherethey wish to put their money, and theyshould be able to invest through existingand preserved national placementregimes.

But the same proposals also suggesta restriction on hedge funds investingmore than 30 per cent in funds domiciledoutside of the EU.

Other suggestions made by Gauzèsalso bode well for Gibraltar, includingthe removal of the suggestion of regula-tion of funds with less than 100m inassets under management (AUM). Thiswould keep the niche, boutique or familyoffice manager out of the scope of theDirective.

On the whole, many of the concernsraised by investors have been taken intoaccount and can be seen percolating intothe draft legislation, although there arestill industry concerns in relation to theregulation of short selling and the use ofleverage.

The amendments will receive a sec-ond consideration in March and then avote in ECON in April. The draftDirective then faces a maximum of threereadings if the European Council and theEuropean Parliament fail to reach agree-ment, with a target deadline of January2012 for the implementation of theDirective in national law.

Regardless of these changes,Gibraltar continues to offer an attractiveEU base for managers and promoterswishing to bring their products into anEU regulatory framework and seeking

Despite numerous proposed changes,Gibraltar is well placedto capitalise on the proposed EuropeanDirective controllingFund Managers, argues Joey Garcia.


Funds find a newhome in Gibraltar

the EU regulated ‘stamp’ on their investment products.

This is particularly so at a time whenthe Gibraltar Funds industry is gatheringmomentum.

Developments elsewhere - such as asubstantial increase in Cayman registra-tion fees following that country’s well-reported budget deficit – also could assistGibraltar in gaining a greater marketshare.

In the post-Madoff environment, thetrend of domiciling funds in well regulat-ed and supervised jurisdictions such asGibraltar has gained popularity and weexpect this trend to continue

There will be continued interest inthe re-domiciliation of Funds intoGibraltar from various offshore and non-EU centres.

The procedure for re-domiciliationunder the existing Gibraltar Companies(Re-Domiciliation) Regulations 1996 isquick, simple and effective

The process ensures continuity ofperformance, allows for assets to remainuntouched without the need for transfersor adjustments, and crucially, providesfor unit holders to remain registered asthey did in the foreign jurisdiction

The fund must be domiciled in ajurisdiction recognised by Gibraltar forthis purpose and must have appropriateprovisions in its laws.

Continuance of a foreign company inGibraltar does not create a new legalentity or prejudice its continuity, nor doesit affect the assets or property originallyheld. The Financial Services Commissionneeds to be satisfied that the company isin compliance with local financial servic-es supervisory laws before granting EIFstatus.

The company is required to appointa local fund administrator, auditor and atleast two directors, all authorised by theRegulator. The existing investors mustalso qualify as “Experienced Investors”(as defined in the legislation).

Once the foreign company becomesa Gibraltar company, all counterpartiesare appointed and the documentation isin place, the standard EIF registrationprocedure is followed, including an opin-ion from Gibraltar counsel confirmingthat the EIF satisfies the relevantFinancial Services legislation.

Joey Garcia is a senior associate andfunds specialist at law firm, Isolas

FUNDS

being the drivers.Gibraltar International understands

that Atlantic Suites has recently beenacquired by a UK-based investment consor-tium that has set conditions on the types ofbusiness it wants to see occupy the building- hence the low key launch.

Now Ocean Village is investing inanother seven-storey block with 13,000m2

of office space and 600 car parking spaces.The block on the car park behind

Marina Bay has outline planning permissionand work is expected to start by summer forcompletion in stages from the end of 2011.

Desperate need“We desperately need more office space inGibraltar. There are three large companiestrying to come here – two have told me thatthey only want to be at Ocean Villagebecause of the lifestyle and associatedleisure and residential facilities”, says BrianStevendale, the Village’s sales director.

“However, we don’t have any space forthem at present. One is a 40-staff Londonmarket trader, the other employs high-earn-ers almost exclusively, which is good forGibraltar because of the potential localspend on goods and services, as well asproperty.

“They bring huge wealth to this jurisdiction”, he emphasises.

“In the meantime, I am attempting asticking plaster approach, by accommodat-ing an advance guard of 20 people in a firm,

sometimes by temporarilyspreading people around -a chess board approach,Stevendale reports. “Weare not anxious to turnpeople away.”

Edward Macquisten,director of GibraltarChamber of Commerce,points out: “Gibraltar’slack of office space today can act as a brakeon the influx of new businesses; they look atwhat we have and pause before making anydecision, although the pressure has eased alittle with the current economic situation.

“Even so, Gibraltar Inc. needs to beable to offer good quality office accommo-dation. Today, banks require more securityand commitment from prospective tenantsand purchasers before releasing money fornew office development, but certainly thereis confidence in the medium to longerterm”, he explains.

Brian Stevendale added “Funding isdefinitely not a problem for our plannedRoyal Ocean Business Plaza block – beingcreative, we have found several people keento invest and the money is in place, althoughnot necessarily involving bankers.”

£120m project startsAs if to reinforce that view, CommercialDevelopments Investments (part ofMontagu Group) has revealed to GibraltarInternational that construction of its

estimated £120m project will begin in thefirst quarter of this year.

Local business leaders had been doubt-ful that the project to create what willbecome Gibraltar’s largest office develop-ment - four blocks totalling 38,000m2 atMidtown - would proceed!

Rock Tower, the £30m first 13-storey,10,000m2 block with parking - on the siteof a multi-storey car park just outsideGibraltar’s city walls - gained detailed planning consent in September 2008.

Montagu’s chief executive, JamesGarbarino, explains: “The delay has beencaused both by local land possession issuesand the global economic situation, but thefunds are now in place. It is expected to take30 months to complete.

“There is a strong demand now foroffices – 25 per cent at Rock Towers hasbeen reserved – both for sale and to rent,particularly amongst local firms seeking toexpand or move from rental to owning theiroffices.” One floor of 1,180m2 was sold to

SSchemes announced and now in theplanning pipeline are set to nearlydouble the total estimated 94,000m2

of existing offices on The Rock.Some of the offices could be

ready for occupation in 2012, and some unexpected space is available now!

The new developments cannot comefast enough, because a market survey lastsummer by leading local surveyor, BrianFrancis, found that an estimated 99 per centof existing space was at that time sold or let.

Since then, the current available space iseven less – it has around halved to become0.5 per cent, just 4,700m2!

That creates problems for existing busi-nesses – particularly in the e-gam-ing and finance sector – that arelooking to expand their Gibraltaroperations and transfer staff, prin-cipally from the UK.

Finding sufficient office spacecould also be a problem for newfirms attracted by low CorporationTax!

Whereas securing sufficientresidential accommodation for staffused to be an issue, where to locatethe business premises has nowemerged as a potential obstacle,such has been the success of governmentpolicies in providing an appealing base forcompanies.

Expansion of business activity is neededto help off-set the loss of revenue from areduction in the present 22 per cent tax rate,only part of which is expected to be madeup next year by extra income from the exist-ing Zero Rated businesses, including some

e-gaming companies, private banks andinsurance firms.

But planned new office developmentcould add an estimated 9,000 jobs inGibraltar in little more than two years,assuming any existing space that is vacated(in favour of the new developments) is alsotaken up. That is good news for government revenue in tax contributions.

The Francis survey suggested thatdespite the potential demand for offices,there were only small amounts of availablespace, each with relatively small floorplates.

These included the recently completedWaterport Place, bought speculatively by

private investors where 90 per cent of the 7,900m2 space is now let (mainly to e-gaming businesses), and also in odd spotswithin the Ocean Village mixed use marina,retail and office development.

BFA’s sales & marketing director,Maggie Mifsud, says that already 220m2 ofthe 780m2 unlet office space consisting offour offices, is under negotiation.

“Space is going fast; there’s very littleavailable at present”, she notes.

In the Village’s Royal Ocean Plazablock all of the 13,000m2 of offices havebeen let, and the 3,500m2 of offices at adja-cent Majestic Ocean Plaza was sold last yearto investors for their own use or for letting;already around a dozen small firms, includ-ing two insurance companies, a customer

services operation and an asset managementbusiness, have taken up most of that space.

25% more space nowHowever, Europort – at present Gibraltar’slargest single office development, built in1992 with 47,000m2 as a speculative venture by Danish firm Baltica for an esti-mated £200m - has just increased its useablearea by 25 per cent.

Low-key marketing began in Decemberof 4,000m2 of quality office space in its fifthblock – Atlantic Suites - in the 14-storeybuilding that also offers 120 luxury apart-ments.

Already, a quarter of the office spacehas been reserved for an expandingGibraltar Financial ServicesCommission, which will more thandouble its present office area inanother Europort block from thissummer.

“We have over 96 per cent occu-pancy in the four original blocks,and since the departure ofGibtelecom and S G Hambros, nego-tiations are in progress with a coupleof other financial services firmsrequiring extra accommodation,”declares Europort managing direc-

tor, Lawrence Isola.Europort originally had nine blocks but

initially space proved difficult to fill; plansto incorporate a 5-star Hyatt Regency Hotelon the Atlantic Suites site also fell through.

In the late 90s, a Danish insurance com-pany took over the venture when just 40 percent of the space was occupied, and shortlyafter, blocks 1-4 were sold to theGovernment and transformed into the pres-ent St Bernard’s Hospital, leaving an Arabconsortium of private investors to buy theremaining blocks in 2000.

Isola, then a director of BMI estateagency, became part of the Arab deal and hesucceeded in raising occupancy from thethen 47 per cent to reach capacity by 2006,with gaming, banking and government


PROPERTYPROPERTY

Developers and investors are showing fresh interest in building more offices inGibraltar to meet demand from businesses being attracted to the territory by theprospect of low Corporation Tax within the EU, as Ray Spencer discovers.


Office space set to double

Four floors of offices just released at Europort’s Atlantic Suites.

Artist’s impression of Mid Town £120m development superimposed on land itwill occupy, with Rock Tower (right) now being started.

“A long term vision on how Gibraltar willdevelop”, is how the Gibraltar Governmentdescribes its new Development Plan thatsets out strategic goals and planning policiesfor the next decade.

The Plan has been the guide to deci-sions taken over several months, eventhough it was only formally approved lastautumn after an extended period of publicconsultation.

“It places much emphasis on improvingthe standard of design in all new develop-

ment, whether small or large scale,”Minister for Development, Joe Holliday,told a launch press conference in December.

“It also encourages a more sustainableapproach to development through energy-efficient design and use of micro-renewableenergy generation, although this has to bebalanced against aesthetic considerationsand the potential impact on surroundingusers,” he said.

But there are no cash incentives, noractual requirement, for adoption of solar

and other environmentally friendly andenergy efficient solutions, althoughHolliday told Gibraltar International that“we do not rule that out for the future”.

Government-sponsored projects are not formally subject to the policies and requirements.

Guiding principles set out in the plan,include height restrictions for some areasand a desire to improve public access to thewaterfront wherever an opportunity arises.Gibraltar has been divided into nine landuse zones with specific policies and proposals formulated for each.

The Gibraltar Development Plan can beviewed at www.gibdevplan.gov.gi.

A 2020 vision

Continued page 18

not many places wherethere’s such commitment

to speculative building

“

”

Argus Insurance more than two yearsago.

Rock Tower’s second floor has thelargest floor space with 1,201m2 quotedat £4.3m (a cost of £3,550 per m2), whilethe 500m2 top floor is smallest and mostexpensive at £5,000 per m2. However,Garbarino says the building designallows maximum flexibility for spaceconfiguration from just 200m2 and“prices may need to be tweaked”.

“Although we have outline permis-sion for a mix of residential, office andcommercial use, my view today is that wewould build mostly offices with a fewstudio type apartments for use by firmswith executives requiring temporaryaccommodation”, he maintains

“However, it’s difficult to predictfuture demand when it will take us ten ormore years to complete thisproject.” Garbarino acknowl-edges.

Three more comingFirst strong indications thatinvestors were looking morepositively at office develop-ment came late last year whenBoyd Estates revealed that ithas spent £12m-£14m overtwo years acquiring threeproperties in Gibraltar – twooffice projects and a smallretail and office site.

The Boyd Group is a con-sortium of Capital &Overseas Holdings – with 38years’ experience in redeveloping com-mercial, retail and residential propertiesin the UK and abroad - a local privatetrust family investor and a bank.

The nearly 10,000m2 of space isexpected to be completed in phasesbetween 2011 and 2013 bringing thetotal investment to £60m.

The largest, Rialto House on the siteof the old Continental Hotel and RialtoCinema in Old Town, will account fortwo thirds of the investment and provide6,400m2 of office space, with floor platesof 400 - 1000m2, as well as a 500m2

ground-floor retail unit fronting MainStreet.

It incorporates sustainable featuressuch as fixed sun shading, double-glazedfaçades (to reduce air conditioning con-

sumption) and sea-water for non drink-ing use, and needs outline planning consent.

Forty7, in Line Wall Road (andopposite the Midtown development) hasoutline planning permission for a seven-storey block and 1,850m2 of grade Aoffices with similar design features,including a landscaped roof area andnumerous terraces.

Half of this block has been pre-let toMarrache & Co, one of Gibraltar’s lead-ing law firms and work is expected tostart shortly.

The existing facade of Boyd Houseon Main Street is being retained and out-line planning consent gained for nearly300m2 of retail space and 700m2 ofoffices, with work anticipated to start bymid-year.

Boyd is led by Ronnie Nathan,Capital’s chairman, who intends to

undertake a further three undisclosedcommercial projects in Gibraltar, as partof a separate consortium!

As Nathan says: “Gibraltar has tra-ditionally suffered from a lack of GradeA offices and suitable retail units; there isa pent-up demand. These planned proj-ects will go some way towards alleviatingthe chronic undersupply of space available.”

Some caution tooHe feels The Rock has “escaped theworst of the global downturn, remainingstable and continuing to grow as firmsfrom the financial, legal and online gaming sectors continue to locate in theterritory”.

However, Europort’s Isola sounds a

cautionary note. “Gaming for some timehas been a strong driver for commercialproperty demand and there is a bigdependence on its continued success, butthe current trend for mergers between thecompanies may lead to a reduced needfor existing offices in the medium term”,he feels.

Gibraltar’s newest commercial proj-ect is at the ICC shopping centre offCasemates Square, where owner BasiProperties is looking to add two addi-

tional floors of offices.In addition, approval was

granted three years ago to theEastside Development masterplan, incorporating residen-tial, hotel and potentially thesecond largest single officesite of 19,190m2, but therehas been no ground works onthe scheme.

A 0.24 hectres site – similar in size to WaterportPlace - is also marked foroffice development near to Tradewinds on land once occupied by theMediterranean Rowing Club.Temporary use as a 86-space

public car park is being sought byMontagu Properties, a private investor(unconnected to Montagu Group), whobought the site last year from TaylorWoodrow.

Further in the future is the potentialfor office redevelopment, along with stor-age and distribution at the government-owned old Desalination Plant and cur-rent Electricity Generating Station that isexpected to be decommissioned inaround three years’ time.

As Ocean Village’s Stevendaleremarks: “We have found it easy to selloff-plan and for rental. We are investing,because we believe in Gibraltar; therearen’t many places in the world whereyou will see such a level of commitmentto speculative building.”

PROPERTY


New Locations To be built Sold/let Midtown 37,000 2,500 Rialto House 6,400 - Forty7, Boyd House, ICC 2,750 900 Former MRC site* 8,000 - Eastside project 19,190 - Business Plaza, Ocean Village 13,000 - Totals 86,340 3,400

Existing locations Available now Sold/letAtlantic Suites, Europort 3,000 1,000 Waterport Place 780 7,130 Leisure Island Business Plaza, Ocean Village 365 3,535 Majestic Ocean Plaza, Ocean Village - 3,500 Royal Ocean Plaza, Ocean Village - 13,000 Europort 600 15,400 Other (BFA survey, 2009) - 46,000 Totals 4,745 89,565

* estimated size of site office potentialSource: Gibraltar International Magazine research, early January 2010

Office space winter 2009

Boyd Group’s Forty7 office development site seenfrom Kings Bastion.

Office space set to double from page17

“In a world where even thebiggest banks were at riskof failing, to find one’s-self without any borrow-ings and a veritable war

chest was very fortunate indeed”,remarks Chairman James with typicalunderstatement.

Rarely interviewed, James is dis-cussing his business strategy followingthe sale of GB Airways (GBA) to easyJetfor £103m two years ago.

Aviation has formed part ofthe Bland Group for three genera-tions of Gaggeros and began whenin 1931 Sir George Gaggerolaunched the then GibraltarAirways and pioneered flightsacross the Straits of Gibraltar toTangier using an amphibian aircraft.

At its peak in 2007, GB Airwayswith a £300m turnover, employed 1,000staff and carried 3m passengers annual-ly in 16 modern A320 aircraft on 44routes from the UK across southernEurope, the Canary Islands and NorthAfrica.

“To contemplate exiting from thevery business that had served our inter-ests so well, was not an easy decision totake”, 50 years old Gaggero notes.

“With the benefit of hindsight, it did-n’t take very long to be proved how rightwe were in making our decision. Within

a matter of months, the financial worldcame unstuck and within six months ofthe deal most people were being reallyquite generous in their acknowledgementof our good fortune”.

The Bland Group is this year cele-brating its 200th anniversary. James’ancestor, Joseph Gaggero took over theBland ship agency in 1891 with hisbrother Manuel - great-grandsons of the

first Gaggero to settlein Gibraltar 90 yearsearlier from Genoa.

The Gaggeros became one ofGibraltar’s great merchant dynasties,progressively developing further intoshipping, introducing port and airportservices, funding the Gibraltar Cable Carproject, buying the iconic Rock Hoteland spreading beyond Gibraltar.

But in 1986, Joe Gaggero, (James’


London Gatwick. Within three moreyears, GBA was working 28 flights aweek from the London hub.

“We got into the airline business in1931, it wasn’t until the last 15 years thatthe airline came to dominate our economic activity and our success as afamily”, James observes.

In 1995 – 13 years after joiningBland - James bought out BA’s 49 percent stake in GBA for a price that hedescribes as quite modest.

“My father didn’t believe it would bepossible to persuade BA to release itsinterest, let alone at a price which wewould be able to afford, but he supported me.”

Gatwick move ‘fundamental’Later that year, GBA joined BA as a fran-chise partner. “I recognized that it wouldallow us to accelerate our growth, but apoint would then be reached where wewould not be able to afford to buy themout, so it was critical to execute BA’s exitfrom the company before we took therisk in expanding GBA.

“Expansion of services on theLondon route was important, but mov-ing the GBA headquarters to Gatwickwas absolutely fundamental – we had toomany eggs in one basket.”

That important decision was takenjointly by Joe and his son, but Jameslargely drove it. The decisions to buy outBA, the franchise and the development ofthe route structure- particularly out ofHeathrow - were all key.

“With hindsight, Heathrow wasespecially lucrative”, James reveals.“When we sold GB Airways, it enabledus to greatly increase the amount wereceived beyond that paid by easyJet.

James had no previous businessexperience. Having been at Englishschools since age seven, he did notprogress to university and instead wentto Sandhurst Military Academy ratherthan continue with formal education.Nevertheless, it was “a three-year, phenomenal life education”.

His father was “exceptionally sup-portive and experienced in the world andprepared to shower business acumen onme from a very early age - the equivalentof a PhD in business”.

He worked alongside Joe for 27years. James became chairman of BlandLtd, effectively the trading operation, in1987 and Group chairman 20 years later.

It wasn’t a question of taking busi-ness risks either: “when you are young,you don’t know what the risks are – itwas exuberance and enthusiasm thatdrove some of these things on, in a waysome people would have said was irrational”, he concedes.

In 1997 he joined chief executives oflarge business corporations from acrossthe world on the renowned US HarvardBusiness University’s flagship intensiveAdvanced Management Programme.

“I was surrounded by 160 super-bright people. The thing that surprisedme was that there was nothing that Ilearnt - a business philosophy, disciplineor anything of that kind – which I hadn’talready picked up through good businesspractice, through my father and the people who I mixed with.

“However, it put much more struc-ture to the thought process of buildingand developing businesses and some ofthe key components, and how to setabout solving problems, creating aprocess and becoming more efficient -that was invaluable,” he notes.

GBA had 16 aircraft in operation atone time and another as back-up, thefirm buying and operating each for twoor three years before entering sale andlease back arrangements.

“Frankly, I was always amazed thatwe could get credit terms that wereincredibly attractive and in many waysbetter than BA; we were given very pref-erential, almost Sovereign rates”, herecalls.

But James saw how BMed, anotherBA franchise partner, had been adverselyaffected by the Beirut crisis without BAsupport. In part, that prompted the end

of the franchise arrangement with BAand the change of direction to today’smulti-faceted business. It was a definingmoment for Bland Group.

“After much research and analysis ofoptions for survival, the exit strategyseemed most sensible”, James says.

Some Group diversification hadbegun prior to the sale of GBA. BlandTravel coaches and car hire, and Gibairground handling date back to 1947, theSouthampton-based Cadogan Holidayswas a major investment in 1954 andBland acquired the Rock Hotel threeyears later. Travel agencies in Spain, theUK, Channel Islands, Malta andMorocco were also added.

But since 2006, to help replace theGBA business, nine other business – somelarge - have been added, four in the pastyear in four key investment areas – engi-neering, transport, travel and real estate.

These are at the root of Gaggero’sstrategy to diversify risk by location andby business sectors, in marked contrast tothe previous overwhelming dependenceon the airline.

Substantial property assets Gaggero won’t reveal much financialdetail about the Bland business: “It’s aprivate, family business and I like it thatway. Every time we give away somedetail about our business, people starttrying to dissect it, and it’s of no benefit.”

Bland now employs some 740 peoplein 18 businesses and “the critical thing isthat we don’t have any borrowings, pluswe have substantial liquid assets – over£100m at present - and substantial realestate assets; there are tens of millions ofpounds of property that are not shownanywhere”.

Included in the property portfoliofrom 2000 is the former GBA headquar-ters at Gatwick Airport, bought fromBAA. The Beehive, a Grade II listedbuilding, saw a £1.6m refurbishment lastyear to provide 47 high-end individualserviced offices in a joint venture withspecialist, Orega.

PROFILE

Compared with the high risk airline business heused to run, James Gaggero now has a rangeof enterprises spread geographically, with abetter profit stream and considerably less risk -and more than £100m cash to invest! RaySpencer finds out what makes the Bland Groupone of Gibraltar’s most enduring businesses.


Still flying highfather) and his younger broth-er John, disagreed on the wayforward for the business anddecided to progress separate-ly. The shipping agency,stevedoring operations andcable car facility in Gibraltar,together with other considera-tions, were devolved to Johnin a new company, reviving

the name MH Bland.James, who having just completed a

short service commission in the IrishGuards, joined Bland in 1982 aged 23.“My father was very supportive of theidea that I should come back to Gibraltarand join the family business which heviewed as a relay race involving the fam-ily in a multi generational endeavour. Itwas he who persuaded me of the merit ofreturning to our family’s home town”.

Initially understudying various Blanddepartments, he gained most experienceat GBA “where I then learned what ourairline operation was about – basically,a small daily scheduled air serviceacross the Strait”.

GB Airways also flew a couple offlights each week to London under aclass 5 license operated by BritanniaAirways, which provided crews and air-craft. That meant GBA outsourced thebusiness of flying to a third party, but retained all economic risk and management.

“When the frontier opened I wasable to exploit my lack of knowledge

about the risks to expand significantlythe number of our flights to the point in1987 where we could justify leasing ourfirst 737 aircraft – that was quite exciting”, James enthuses.

By 1989 there were three GBA air-craft, and with the airline’s own opera-tor’s certificate, the base moved to

PROFILE

Continued page 23

A third of the space has already beentaken in the building that “dates back to1935, right at the very beginning of civilaviation, which coincides with our owninvolvement from 1931”.

Another portfolio property histori-cally linked to Bland is the formerAdmiralty-owned Cloister Building inGibraltar’s Irish Town. It was remodeledby James’ great, great grandfather JosephGaggero and his brother Manuel in 1891to provide a home for the family and forthe business, and James now shares thebuilding with his cousins at MH Bland.

The 1,100 year old Encombe Estatein Dorset, complete with farms and 3.5miles of World Heritage coastline wasbought last June by James Gaggero as ahedge against inflation. “This investmentmade better sense to me with a long termview than say, owning gold.”

Bland’s largest single business acquisition was in late November -Weymouth-based, Universal Engineering(Charlestown), with 250 highly skilledstaff and £25m annual sales of specialistequipment for the aircraft, nuclear andoil industries, as well as armoured vehicles for the military.

“The challenge for Universal wasthat the enterprise had reached criticalmass, but the founders who ran it didn’thave the resources to drive it forward, sowe are adding our business disciplinesand cash to make their further develop-ment possible”, explains James.

£4m military investmentAs an early result, the number ofUniversal’s demonstration Ranger mili-tary vehicles – “a revolution in terms ofoffering protection so far in excess ofanything on the market today to troopsin counter insurgency roles and opera-tions like Afghanistan and Iraq” - isbeing increased from one to four at a costof roundly £1m each.

The first vehicle is being tested, and“the Canadians, Malayans and Britishhave short-listed our vehicle for final tri-als, because its extraordinary designfocused on protecting those inside makesit possible to use it as a tank, rather thansimply as a mode of transport, but withhigh speed and maneuverability.

“I am acutely conscious of the inad-equacy of fighting wars without properkit and I know this sort of kit needs to be

developed”, James declares.He firmly believes: “There is an ele-

ment of British engineering and manufac-turing excellence with huge potential thatis seriously under-rated and the challengeis to find a way to bring these to fruition.There’s no better time to be going in –there’s no merit in buying into businesseswhen they are at their peak”.

Talented individualsGaggero sees similarities with BlandGroup’s hovercraft businesses bought inmid-2008 – Hoverwork and Griffon –and merged into a single entity last year.

James is candid: “They have beenaround for some 50 years, run by talent-ed individuals, who are very good atdesign and building technically excellentamphibious and hover craft, but lack thedisciplines and business acumen andfinances to get to the world stage”.

Adrian Went, Griffon Hoverwork’smanaging director, told the DailyTelegraph: “As a family investor organi-sation (Bland), their eye is on the longterm, whereas a venture capital investormight only be looking at three years.”

That has meant the firm adding 30staff to bring the total to 120, supplying39 governments on six continents andforecasting sales rising to £22m this year– up from £11m in 2009 - and £35m nextyear. Using a new body design developedmore from lightweight shipbuilding thanaircraft, and high-performance dieselengines has both raised performance andreduced the price and maintenance costsof its hovercraft. Current orders rangefrom small four-man craft for AbuDhabi’s special forces, to a 180-seaterpassenger craft similar to that used by sis-ter company, Hovertravel, to link the Isleof Wight and Portsmouth.

Teleticket Travel, a Brighton-basedflight consolidator, has had three goodyears under Bland ownership. “The eco-nomic downturn has helped provideopportunities, but it’s very tough,”Gaggero admits. “The travel trade iscatching the cold that swept across thefinancial sector last year.”

He nevertheless foresees “a brightand exciting future”, for Teleticket afterthe next 12 “difficult” months and, simi-larly, for Cadogan Holidays, the onlyBland businesses now not making profit.

Conversely, Skybreak - an airportrepresentation company at Gatwick

Airport South Terminal that Blandbought in 2007 – is doing “very well”and expects this year to open new officesin other airports around Britain.

“It’s difficult to imagine a set of cir-cumstances which could be worse for theairline sector, and some airlines - literallyfighting for survival - are doing verydumb things, given there’s too muchcapacity at this time”, James observes.

He’s adamant: “Service cut backswere inevitable. Gibraltar is not even aconversation in a meeting, it’s a financialdecision racked up against a multitude ofother decisions”.

Although it saddens him that easyJethas halved Gibraltar services to just one aday for this year, “I have absolutely noreservations about easyJet being the ben-eficiary of the efforts of three generationsof my family”, says James.

But if Bland still owned GBA it prob-ably would not have cut services.“Gibraltar was one of five good businessroutes we operated. The Gibraltar routein the hands of a focused individual isone that works.

Economic ‘magic dust’“From our perspective it was the mainshow in town. It was our home city andthe economic activity we generated local-ly was sufficient to cushion the immedi-ate impact on airline operations”, withpeople staying at the Rock Hotel, takinga tour, travelling on Blands buses, orusing its airport handling company.

It’s what James calls “magic dustsprinkled throughout the economy”. He’sinsistent however, that a new Gibraltarairport terminal is absolutely necessary,though he was daunted by the reported£50m “eye-watering cost – I just wish itcould be done more cheaply”.

However, James is clear from experi-ence that “you need good communica-tions to really have a chance to succeed.Gibraltar cannot be isolated; it cannot becut off from its market place”.

Married with two sons James shunspublicity, although in this Bland Groupbicentenary year, “it’s necessary and rightthat we put a human face on what we aredoing, particularly in Gibraltar.”

Few people will recognise James; hisphotograph (on page 20) is the only onehe will permit to be used, “not becauseI’ve more grey hair now, but because it’snot about me – it’s about Bland.”


PROFILE

Continues from page21

Since the Data Protection Act2004 (DPA) came fully intoforce, the Commissioner’s com-pliance teams have been investi-gating complaints and potential

breaches of the law.There has also been a surge in

enquiries from both public and privatesectors. the basics of DP are commonknowledge. Although the basics of whatis involved are generally understood, wehave found that there is a lot about DataProtection, which many are not fullyaware of.

This includes the obligation to pro-vide information held about individualsupon request and the need to purge certain information that is no longer rel-evant or necessary.

As a result, our teams have beengoing out to spread the word that anyinformation or images kept by organisa-tions on individuals must be accurate,complete and up-to-date – usually withthe knowledge of those affected.

Failure to do so can involve enforce-ment or compliance notices and legalaction resulting in fines.

The Data Protection Commissioner’sOffice has been in operation for overthree years and in this time, it has under-gone a variety of activities all gearedtowards achieving compliance with theAct.

Lack of understandingThroughout this time, one issue regard-ing data protection has arisen continu-ously, it is common to both the privateand public sector, and is seen across mostindustries in Gibraltar.

When faced with the question ofwhat measures are being undertaken toensure personal data is protected, busi-

nesses and organisations assert that theirdata protection requirements are metthrough the use of computer passwordsand filing cabinet locks.

However, what this actually revealsis that there exists a lack of understand-ing of data protection requirements.

The DPA is most certainly not aneasy piece of legislation to follow. It islengthy, technical, complicated in manyplaces and almost certainly indigestiblewith one single reading.

But within its ambits exist its mostimportant feature, that being the dataprotection principles (the “Principles”).The DPA derives from a EuropeanDirective and so the Principles are common to all European Member States.

If an organisation uses personal dataabout individuals - either in the form ofcustomer data, or employee data or evenCCTV images of identifiable individuals(in a retail outlet or for building securityfor example) - the organisation will auto-matically be a data controller under thedefinition in the DPA.

Data controllers, by virtue of section6 of the DPA are obliged to comply with


Data controllers are obliged by thenext Principle to only collect and keeppersonal data for one of more specifiedpurpose(s). When collecting personaldata, it is important to ascertain, what itis going to be used for and, more impor-tantly, make that known to those aboutwhom the data is being collected.

Data controllers must ensure that thedata being collected is only for a specificpurpose. Collecting information aboutsomeone simply because it may servesome purpose at a future date, is incompatible with the Principles.

Indeed, the Principle which followsstates that personal data which has beencollected may not be used in a mannerwhich is incompatible with that forwhich it was originally collected.

In essence, even if personal data iscollected for a specific purpose andintended to be used as such, the data con-troller is not allowed to then use thatinformation for another purpose.

An example of incompatible usewould be information collected legiti-mately to maintain client records, which

is subsequently passed to a third partywithout the knowledge or consent of theindividual and then used for marketingproducts or services to them.

Not excessiveThe next two Principles providing requiredata collected to be adequate, relevantand not excessive for the purposes forwhich it was collected. This means con-sidering how much information is actual-ly required for the purpose(s) - irrelevantor excessive amounts of data breachesthe Principle.

Quite possibly the most commonbreach found in Gibraltar of the Act iskeeping data for longer than necessaryfor the original purpose.

Locally, there is a trend - particularwithin the public sector - to store indefi-nitely information with little or no plansto discard or purge unnecessary data.

Maintaining appropriate levels oforganisational and technical security toprevent personal data being accidentallyor intentionally accessed, destroyed oraltered is the final Principle.

Data controllers must consider thedamage that might result if appropriatemeasures do not exist and requires adop-tion of appropriate security for their ownenvironment.

The Gibraltar Health Authority,Income Tax Office and banks, for exam-ple, are expected to maintain substantial-ly higher levels of organisational andtechnical security measures than smallerenterprises that process less sensitive per-sonal data. There must be adequate pro-tection against unauthorised access todata through electronic networks.

In conclusion therefore, protectionof personal data goes beyond simplyadopting a password policy and lockingdoors at night. It requires proper consid-eration of the Principles and properimplementation in each of the processingoperations being carried out by the datacontroller. Indeed, much of the workbeing carried out by the Data ProtectionCommissioner’s Office has been just that– educating data controllers about theirobligations to ensure Gibraltar’s personaldata has a high degree of protection.

DATA PROTECTIONDATA PROTECTION

Much of the information and images stored by public and private sector businesses is out of dateor inaccurate and in breach of the law, much to thesurprise of the organisations involved, followinginvestigations by Gibraltar’s Data ProtectionCommissioner’s Office.


Keeping personal informationmeans maintaining principles!

the Principles, failure of which will see abreach of the DPA taking place.

Fair and lawfulData controllers must obtain and processany personal data in a fair and lawfulmanner. This is probably the mostambiguous Principle in the DPA, becausethe ‘fairness’ is open to interpretation.

Fortunately, this has been addressedon many occasions both locally and byData Protection Commissioners in otherjurisdictions and so a clear picture hasdeveloped of what fair obtaining andprocessing is.

Essentially, a data controller mustensure that when obtaining any personaldata, it does so in a manner which doesnot prove to be intrusive upon an individual’s privacy.

Obtaining information aboutemployees by monitoring their activitieswithout their knowledge or consent forexample, is likely to be considered unfair.

Data controllers must ensure thatwhen obtaining personal data it is doneso, wherever possible, with the fullknowledge and consent of the individualsinvolved.

Keeping up to dateThe second Principle provides that per-sonal data must be accurate, completeand up to date.

Although this seems to be nothingother than good business sense, it hasbeen surprising to learn that many localdata controllers are in breach of thisPrinciple!

In particular, many data controllersin the public sector maintain records dat-ing back many years meaning that muchof the data stored is now out of date - forexample, the original CV’s and applica-tion forms of applicants who have servedfor several years.

Some investigations have arisen afterfinding data controllers processing inaccurate data - incorrect mailingaddresses, for example - which has result-ed in sensitive data being disclosed tounauthorised persons.

Maurice M. Hook Gibraltar Data ProtectionCommissioner’s Compliance Manager

A ‘nominal’ tax on pensionincome from funds transferredunder the UK QualifiedRegistered Overseas pensionsScheme (QROPS) is to beintroduced by GibraltarGovernment after reachingagreement with HM Revenue& Customs.

The move has been neces-sary because HMRC threat-ened to remove Gibraltar asan ‘acceptable’ jurisdictionafter ruling that the territory’sZero Rate tax was against thespirit of UK pension rules.

Failure to agree couldhave meant private companiesand individuals facing up to a55 per cent tax charge on pen-sion funds relocated to the ter-ritory.

Hundreds of retiredGibraltarians, who haveworked in the UK for yearsand built their pension funds,would face the penal charge,and others prevented fromtransferring their fund to theirhome territory.

To resolve the problem,

Gibraltar is understood to bepreparing draft legislation totax pension income receivedfrom a QROPS and it isexpected to be implementedby summer.

Local pensions are unaf-fected by the proposed newtax and there will be no tax onthe value of fund transfers.

“A huge amount of busi-ness has been lost during thepast year as a result of theuncertainty and other jurisdic-tions have been capitalising onour dilemma,” acknowledgesDavid Erhardt, chairman ofthe local Association ofPension Fund Providers.

But he revealed: “We stillhave a lot of transfers waitingfrom people who have beenprepared to wait, rather thango anywhere else. They want-ed to have their pensions inGibraltar.”

The UK Revenue notifiedThe Rock’s providers in April,of its concerns that Gibraltar’stax treatment for pensionincome breached its QROPS

INVESTMENTINVESTMENT


Demonstrating its commitmentto do all it can to encourage new business, theGovernment’s InvestGibraltarOffice has launched a websiteto act as a gateway for businessrelated advice, guidance andsupport.

Joe Holliday, Minister for Enterprise, Development,Technology and Transport,says “The business communitynow has access to relevant andup-to-date information twenty-four hours a day, seven days aweek.”

The InvestGibraltar Officehas a remit to encourage, pro-mote and facilitate private sec-tor development and invest-ment and has implemented auser-friendly ‘3 clicks and youare there’ approach to the web-

site, www.investgibraltar.gov.giHolliday explains that the

new initiative recognises thatmore people are using theInternet to conduct businessand various forms of researchand the government “appreci-ates that success in business isdriven by people that are usu-ally overcommitted, work longhours and never have a minuteto spare”.

A business support site, aswell as a databank of informa-tion, offers users up-to-dateinformation on a variety ofbusiness sectors and answersquestions relating to commercein Gibraltar. Business tools,include guides on ‘How tomake a Business Plan’ and aneditable ‘Financial ForecastingTemplate’.

Business lunches – “simpleand not messy to eat, servedquickly” – were unveiled at a promotional event in mid-January at Queensway Quay to meet the growing needs of Gibraltar’s business community. Jazz Nights andintimate dinner dance mealsare also part of the innova-tions being adopted by MikeForster, owner of 14 on theQuay restaurant, in 2010.

“We find that people arelooking for a variety of enter-

tainment in the evening, so thejazz on Wednesdays and aSaturday £25 set-price, threecourse dinner with music fordancing is proving popularfor this year”, says Mike.

The business lunches fea-turing rack of lamb, guineafowl and fresh fish, cost £14for two courses and £17.50for three courses and can beserved quickly to fit in withthe pace of life for profession-als looking to fit in a goodquality meal.

UK Revenue to lift55% tax threat toGibraltar pensions

bedrooms104 Bedrooms and suites in a colonial

style all with a sea view

conference facilitiesFull upgraded conference facilities

available for board meetings, trainingcourses and presentations

InternetFREE Wireless broadband available

throughout the hotel and an internetroom for our guests to use

weddingsThe Rock is an ideal wedding venue

whether it be a small intimate weddingor large family gathering. We are also a

recognised venue for civil marriagesand ceremonies can now be conducted

in various parts of the hotel

Swimming PoolOutdoor swimming pool with poolside bar and pool side menu. We

welcome private pool membership,our lido club, with private pool hire

for parties and barbecues

RestaurantThe restaurant has stunning viewsover the bay. Our “house” menu isexcellent value for three coursesincluding an aperitif Manzanilla,

olives and coffee. A full á la cartemenu along with a superb eclectic

wine list is also available

wisteria terraceThe Wisteria Terrace for lunches,dinner, barbecues, afternoon teas,evening drinks and informal dining

Barbary barBarbary Bar and terrace for a

relaxing drink and for the winebuff, a choice of nine wines by

the glass

LoungesTake a good old fashioned Englishtea in one of the spacious lounges

An oasis...

in a busy world

Europa Road, GibraltarTel: +350 200 73000Fax: +350 200 73513

E-mail: [email protected]

Helping hand fornew businesses

Satisfying businesslunch appetites

requirements, and applica-tions were put on hold orplaced elsewhere.

The pension sector –including law firms and spe-cialist management companies– argued that a zero tax ratestill amounted to a tax chargeand gained top level UK legaladvice to support their claim

Robin Ellison, Head ofStrategic Development –Pensions at legal firm PinsentMasons LLP, said that it wasbeyond the Revenue’s remit todemand tax is paid locally,provided rules were observedto retain the spirit of UK pen-sions legislation.

“We didn’t lose that case,it just that we didn’t pursue itwhen it became apparent thata solution was possible.”

Gibraltar pension fundproviders point out that allpension income is countedfirst in Gibraltar’s progressive

rate income tax calculations.For individuals who have

been non-UK tax resident forfive complete tax years,QROPS provides significantbenefits over the strict UKregime.

They can take control ofinvestments and bequeath anyremaining funds.

But the scheme has beenfraught with problems overinterpretation of HMRCrules. Schemes based inSingapore were removed fromHMRC approved list andfunds subjected to the penal55 per cent UK “unauthorisedpayment charge” after localproviders allegedly breachedthe Revenue’s strict rules.

Guernsey providers alsohad to change in Novemberthe practice of allowing 100per cent cash payouts frompension funds after UKRevenue intervention.

Merchant House, 22/24 John Mackintosh Square, P.O. Box 758, Gibraltar

© 2008 Deloitte Limited. Member of Deloitte Touche Tohmatsu

www.deloitte.gi

Specialist Tax AdviceTailored to your needsWe provide specialist tax advice on a whole fi eld of private

and business issues, making it easier for clients to safeguard

their family assets and wealth.

Deloitte offers a straightforward personal service specifi cally

tailored to clients’ requirements. We make the most of our

expertise and experience to reduce your tax burden and plan

effectively for the future.

For more information, call Joseph L Caruana or Stephen J Reyes on: Tel:+350 200 41200, Nightline: +350 200 48282, Fax: +350 200 [email protected]

fixed line, wireless, internetand data centre services, re-introduced thetelecommunicationsapprenticeship scheme after agap of over 25 years to ensureGibraltar trains sufficientyoung home grown talent.

Stefan Agripino, JarredButtigieg, Richard Cruz,Jaydan Fortunato, TyronneGarcia, Julian Sarmiento, ChadMedina and Neil Wink,underwent NVQ Level 1 inbasic hand skills and “on thejob” structured training,including a health and safetycourse with British Telecom inthe UK.

The apprentices are nowworking towards an NVQLevel 2 and ultimately a Level3 in CommunicationsTechnologies.

Luis Montiel Minister forEmployment, said: “Thispublic/private sector venture

demonstrates what can beachieved through taking aproactive approach in creatingopportunities for youngpeople, and equipping themwith the appropriate skills toserve the local community’stechnology requirements forthe future.”

A new chair

Sheila Nicoll, a director ofGibraltar-based ArgusInsurance Company (Europe)Ltd since 2004, has been

elected its Chairman followingher election as Chairman ofthe parent company, ArgusGroup Holdings.

With over two decades ofexperience in the insuranceindustry, Nicholl has workedat Lloyd’s of London and theNew York InsuranceExchange.

Nicoll, who also issenior vice President ofWhite Mountains ReBermuda Ltd andresponsible foroperations there, islooking to continuinggrowth of the ArgusGroup across itsGibraltar, Malta and Bermudaoperations.

Mauritius moveAfter six years in Mauritius,Kirby Dupont has joined STMFidecs’ largest unit, FidecsManagement Limited, as

Director responsible for newbusiness development.

Kirby has over 15 yearsexperience working in offshorefinancial services, initially withYoung Ridgeway in the UK asan investment adviser buildingan international client base

across a range ofjurisdictions, witha particular focuson the miningsector in WestAfrica.

She moved toMauritius toestablish an officefor The HemeryGroup - a Jersey

based Offshore TrustCompany and was the residentdirector.

Now Kirby travels widely,advising clients and third partyprofessionals on the benefits ofoffshore structuring andestablishing personal trusts.

PEOPLE AND PLACESPEOPLE AND PLACES


Lectures in June.Hassans, Gibraltar’s

largest law firm founded by SirJoshua 70 years ago, decidedto invest in the series oflectures “covering legalmatters and politics thatimpact to raise the level ofdebate in the territory oninternational issues”, sayssenior partner, James Levy.

“We wanted to attractinfluential personalities whocould make an impact”, heexplains adding, “our practiceis increasingly involved inwork overseas and hascontributed significantly to thegrowth of the firm.”

Howard, who will be

almost 69 at the time, was afrequent visitor to Gibraltarand will make the summerLecture one of his last publicspeaking engagements. He isstanding down as Member forFolkestone and Hythe at theGeneral Election this year.

Like Sir Joshua, whobecame Chief Minister ofGibraltar whilst working inlaw, Howard also hascombined law and politicshaving been a barrister since1964 and a practising QueensCounsel, a year prior towinning his parliamentary seatin 1983.

Levy joined Sir Joshua atthe small firm of Hassans in1976 and now there are 70lawyers (24 as partners) and245 staff.

Relationship growsNatWest has appointed PaulMiles as Senior RelationshipDirector to head a new five-strong corporate teamfocussing on the financialsector, including trust andwealth managers, fundadministrators, insuranceintermediaries, the gamingindustry and otherprofessional service providers.

Paul has 35 years’experience with RBS Groupand first moved to Gibraltarfrom Canterbury in 1998. Fiveyears later, he re-located toGuernsey working for theBank’s real estate financeteam, before returning toGibraltar early last year.

NatWest is now the onlybank in Gibraltar with twofull-service branches for itscustomers, having repositionedits former RBS Internationaloffices at Coral Road tocomplement its Line WallRoad main office. A quickdeposit till has been installedand further improvements arepromised this year.

CommunicatingsuccessEight Gibtelecom apprentices,aged 17 to 22, have gainedNational VocationQualification certificates(NVQ), after successfullycompleting the first year of anew four year apprenticeshipprogramme, launched inpartnership with theDepartment of Employment,Labour and IndustrialRelations.

Gibtel, which provides


Kirby Dupont

Sheila NicollPaul Miles

Gibraltar’s WorldKaiane Aldorino, the 22 yearsold Miss Gibraltar,spectacularly has become the59th Miss World!

An administrative officerfor five years inthe humanresourcesdepartment of theGibraltar HealthAuthority, shegained a place inthe final afterwinning thebeach-wearsection and nowalso carries the titleContinental Queen for MissEurope.

Kaiane is expected to be asuccessful ambassador for theterritory in a year when shewill visit dozens of countriesraising money for charity.

She began an Asia tour inJanuary, including Japan,Korea and Vietnam, advancingthe Miss World motto “beautywith a purpose”.

It is the first timeGibraltar has achieved suchrecognition since first takingpart 50 years ago and it is 26years since the Miss Worldcontest was won by MissUnited Kingdom.

Separating outEighteen months after joiningaccountancy firm KPMG inGibraltar, Mike Harvey has

been appointed a director,reflecting “the rapiddevelopment of the office” asthe result of work to developkey local relationships in fundsand insurance for the two year-

old office, separate from theKPMG Isle of Man operation.

Having qualified as anaccountant in Liverpool in themid 90s, Mike moved to

Gibraltar in 2001 toconcentrate on the auditof financial servicesentities and joinedKPMG in May 2008 tohelp re-establish theKPMG brand on TheRock.

Winning streakbwin, one of the largest

on-line gaming firms inGibraltar has won eGamingReview Magazine’s prestigious

‘Operator of the Year 2009’prize for consistency ofservices, leadership in themarket, brand strength andcommitment to responsiblegaming.

A few weeks earlier, bwin- which boasts over 20mcustomers in more than 25core markets - took first placein the magazine’s ‘Power 50’ranking for the second timerunning.

Mixing politics withthe lawMichael Howard MP, who wasLeader of the BritishConservative Party for twoyears until 2005, and a formerHome Secretary, is to be theinaugural speaker at the annual Sir Joshua Hassan

&AroundAbout

Unit 14, Queensway QuayGibraltar

Opening hours

12.30pm-11.00pm, last orders 10.45pm

Tel: +(350) 200 43731

14 On the QuayRestaurant

Mike Harvey

Kaiane Aldorino

Fact: I suffer from abad lower backwhich is treated,usually effectively,by a medical bloke

who regularly beats it in hisspartan treatment room. Andso, on with the story…

I’ve never really enjoyedcruises, as I don’t like to be onholiday with 900 other, usual-ly queue-jumping Italian, peo-ple. Nowadays, even the kidshave opinions which, whilstlacking in merit and weight,are frequently and inoppor-tunely articulated.

We were on an Alaskancruise. I’d earlier hurt myback - badly as it turned out -lugging luggage fromVancouver, inland to Calgaryand back on the driving partof the holiday. The kids,expert in opinions, were con-siderably less so in baggage-carriage.

My wife, in a fit of com-passion and vacational exu-berance and despite my resist-ance, organised my first non-sports massage at ‘The Spa’. Iwas possessed of numerousquestions. Would I – would it- be safe? Would I have toundress? Should I shave thosebits? And what the hell is aSpa? With some trepidation, Iarrived at the small receptionto be greeted by a large-haired, heavily-painted, ruth-lessly slim female, of uncer-tain age, dressed in a kimonoand smiling beatifically at meas if I were an EnlightenedBeing just landed from anoth-er planet.

I was immediately suspi-cious, the trepidation justi-fied. The place had been con-sciously purged of any mas-culinity. I felt that admissionhad been granted by kindindulgence of the New Age

Gaia-Guru, and only becauseI’d paid a hundred bucks inadvance, plus tax. The DivineAssistant, whose aura-halowas almost visible, usheredme into a cubicle where hunga dressing-gown.

“Please make yourselfcomfortable with your experi-ence attire”, she said, which Iassumed was Guru-Tonguefor “Strip down to your Y-fronts”. She’d probably neverheard of, let alone ever seen, apair of M&S standard issue,Big Fat Bloke Y-fronts. I wastempted to leave my pairhanging from a branch of theTree of Wellness in reception.

With some revulsion, Idonned the dressing-gownand slippers, something Inever do in a hotel. I don’tknow if other blokes are likeme but I do not like wearingan article of intimate clothingthat has possibly been previ-ously donned by rugby play-ers, mafia bosses, or GeorgeMichael!

Another female who,despite stockiness reminiscentof a sumo-wrestler and doingher best to speak Guru-Tongue, asked me to lie face-down on the couch, afterremoving the dressing-gown.Good job I’d kept the Y-fronts.

At this juncture, anynotion I’d previously enter-tained of a massage being apleasurable experience wasforever extinguished: she’donly just started, but I wasalready having severaluncomfortable sensations.

First, lying face-downinvolves sticking the protu-berant parts of one’s face in ahole that makes it difficult tomove one’s head from side toside without dribbling.

Second, Genghis Khan’s

cousin had started to apply oilperilously close to where nowoman had gone before.

Third, oil and excessbody hair just do not go.

And fourth, this was nogentle, reassuring, quasi-erot-ic muscle-relaxant. This washard-core brutality, deep-muscle-and-ligament-stretch-ing agony.

Despite an initial brushwith the borders of TheExclusion Zone, the mainambition of the tips of her fin-gers was in pulverising theconvoluted knot of fibres sit-ting in my lower back.

I now understood: mywife, apparently part of thisfemale plot, had told themexactly what was needed tofree me up as the main bag-gage-handler of the tour.

All the paraphernalia -the noxious odours, the pastelcolours, the incense of rareIndonesian timber from man-aged forests, the flowery garb

of the New Age acolytes - allare designed to make onethink one is having a time ofself-indulgent, unguent pleas-ure when it’s really just re-hashed sports physio at threetimes the price, plus tax.

I couldn’t wait for it tofinish. It was probably themost stressful time of my life.

Emasculated in mind,body and soul, I all too quick-ly signed up to the final costand hurried out as fast as myoily feet would carry me. Butat least I had the wits aboutme to resist the purchase ofhalf a crate of creams, gelsand other liquids.

So, why is it called a Spa?I still don’t know but it’s

hard not to conclude that it’sa female sexist conspiracy toboot men out of the hotelpool and replace us withwellness wave-sounds, pastelcolours and fancy smells.And no hair, anywhere.

Chris Pitaluga


LAST WORD

Spathetic

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