Government demands MIDI pay penalties over Manoel Island breach of contract
MIDI denies claims, says its interpretation of contract gives it a 10-year extension for the completion of works
Updated 7.14pm with MIDI reaction.
The government has filed a judicial letter against Manoel Island developers MIDI claiming it did not fulfil its obligations in terms of the land concession deed of June 15, 2000.
The deed had handed the company Tigne Point and Manoel Island on a 99-year emphyteusis for mixed development.
The government declared in the judicial letter that the company must pay penalties due for breach of contract and it reiterated that it would not extend the timeline for the completion of works.
Government to meet MIDI on Wednesday morning
Prime Minister Robert Abela also revealed on Tuesday evening that the government will hold an initial, and important, meeting with MIDI on Wednesday.
On Monday Abela said he was of the view that MIDI had breached contract timelines as well as other contractual obligations. He said a three-year extension against a penalty was given in 2023. This meant that a substantial part of the project was meant to be completed by now, which was not the case.
He hoped that a settlement would be reached out of court, especially since litigation could take years, delaying works to turn Manoel Island into a national park.
MIDI says its contract interpretation gives it an extension of at least 10 years
In a reaction to the judicial letter, MIDI said it was rejecting the government's allegations in no uncertain terms. It insisted there was no valid legal basis for rescission of the contract or the imposition of penalties.
"The relevant deed contains specific safeguards extending the development’s completion date. The Company contends that a correct interpretation of the deed grants the Company an extension of at least 10 years and since the full development permit for Manoel Island has not to date been issued the time period for completion of the development remains, in terms of the deed, suspended," it said.
It said it would vigorously defend its position and would be formally responding to the judicial letter, taking all actions necessary to ensure its rights were fully protected.
Nevertheless, it said, it remained committed to finding a solution to implement the government’s objective for Manoel Island whilst at the time safeguarding its own rights.