Government ‘threatening’ to cancel Midi contract by March

The government is “threatening” to terminate the Manoel Island luxury development project by March 2026 due to contractual “defaults” by Midi plc, the company said in a statement.

Midi said a judicial letter filed by the government, Transport Malta and Lands Authority last week mainly centres on missed completion deadlines for the project. 

Midi has been given six months to remedy these defaults, with a deadline of March 2026 for recission of the concession if it fails to do so. 

The company said it categorically rejects the “allegations” that it is in default of the June 2000 contract terms, under which the government handed over Manoel Island for development on a 99-year lease. 

Midi has put delays in the completion of the Manoel Island project down to factors beyond its control, including permit delays, archaeological investigations, heritage requirements and other events.  

The company said there is no valid legal basis for the contract’s rescission, nor the imposition of penalties. 

“The company will vigorously defend its position through all available legal means,” Midi said. 

The latest legal salvo comes amid talks between Midi and the government to reach an out-of-court settlement for the company to exit the contract. 

Midi confirmed in its statement that talks with the government are still ongoing and characterised the “judicial measures” taken by both parties as a protective step to safeguard their respective legal positions while negotiations continue. 

The company said participation in settlement discussions is in no way an admission of liability or waiver of legal rights. 

“Notwithstanding these formal judicial exchanges, both parties remain engaged in parallel discussions aimed at reaching a mutually acceptable resolution.

“The company continues to engage constructively and in good faith with the government and relevant authorities while maintaining its commitment to this process,” Midi said. 

Midi said it will formally reply to the government’s judicial letter, while continuing to explore all available options to protect shareholders’ and bondholders’ interests.

The company is due to repay a €50 million bond next year, without yet having generated expected revenues from the Manoel Island project.  In June, Midi declared that it is ready to “find a solution” that could see Manoel Island’s return to the government. 

Last week, activists behind the campaign to turn Manoel Island into a park invited the public to take part in a series of workshops and share their ideas on what the island could look like. 

A grassroots campaign spearheaded by NGOs Moviment Graffitti and Flimkien għal Ambjent Aħjar resulted in more than 29,000 people signing a petition to return the island to the public domain and turn it into a park. 

Earlier this year, Prime Minister Robert Abela initially baulked at terminating the concession, before changing tack and declaring himself ready to fight for Manoel Island to be turned into a national park. 

Speaking during an interview yesterday, he pledged to give “Manoel Island back to the people”.