Malita Investments owes €1.5m to contractor on housing project

Malita Investments owes a contractor involved in the government’s flagship social housing project in Ħal Farruġ nearly €1.5 million in fees, with several other contractors also believed to be owed millions, Times of Malta is informed.

The contractor, who spoke on the condition of anonymity, said the government-controlled company has failed to pay several bills for work already carried out.

Three separate pending bills sent in recent months total more than €900,000, with the contractor also seeking to recoup their performance guarantee and retention fee, bringing the total to €1.5 million, once VAT is included.

Last week, Times of Malta reported that two contractors, Calibre Industries and Vella Falzon Building Supplies, had filed two judicial letters against Malita, saying they were owed over €624,000 in unpaid bills for works on social housing projects in Cospicua and Msida respectively.

Sources say the company is also having trouble keeping up with payments on other projects, particularly its flagship 267-apartment social housing project in Ħal Farruġ.

According to one contractor, payments for the project stopped in April, as Malita suddenly appeared to stall payments by introducing new bureaucratic hurdles and requesting additional information for each bill received, seemingly in an attempt to buy time.

The contractor described Malita’s reluctance to own up to its financial difficulties from the start as “unethical and unprofessional”

Despite repeated assurances that the company is not facing cashflow problems, the delays persisted, until the contractor was summoned to meet Malita executive chair Johan Farrugia and CEO Amanda Desira in October.

At that point, the contractor was informed that Malita was facing cashflow issues, and the Ħal Farruġ project being put on hold.

The situation has left the contractor, who described Malita’s reluctance to own up to its financial difficulties from the start as “unethical and unprofessional”, out of pocket and chasing almost €1.5 million in payments.

Sources said this figure could be just the tip of the iceberg, with other contractors on the same project believed to have racked up bills totalling to multiple million euro.

According to sources, the project’s architect and coordinator, Chris Cachia, also stepped down from the project in September. Cachia declined to comment on the matter when contacted.

Times of Malta has reached out to Malita Investments with questions over its reported financial struggles and unpaid bills but has not received a reply at the time of publication.

In a company statement published last week, Malita owned up to “liquidity constraints”, saying it was undergoing a strategic review of the Ħal Farruġ project, but insisted that it was not looking for a government bailout.

Although the government has a majority stake in Malita Investments, holding 82% of its shares, it operates as a private company, making any government funding susceptible to the EU’s state aid rules.

Earlier this autumn, Malita had announced it would be suspending dividend payments to preserve cash resources, as the cash flow required for its development projects exceeded what the company had originally anticipated.