The multimillion euro SmartCity project did go through a slowdown in the first half of the year, the Finance Minister admitted yesterday, confirming the general impression that the project was faltering.

Tonio Fenech's acknowledgement that works at Ricasoli went through a lull was the first of its kind by a government minister.

However, Mr Fenech said Tecom Investments, the Dubai company behind SmartCity, had since reiterated their full commitment to continue with their investment in Malta.

"Earlier this year the project passed through a slowdown after the Dubai investors assessed their investments across the world because of the international recession," Mr Fenech said when asked during a press conference in which he reacted to the International Monetary Fund's latest report.

SmartCity bosses had over the past months repeated that the project was still on track despite an apparent slowdown in construction work. The general impression was further fuelled by news that construction companies in Dubai were hard-hit by the recession.

When asked whether he was concerned that no tenants for SmartCity had yet been announced, Mr Fenech said the fact that Tecom confirmed their investment in Malta showed there were good prospects. Speaking in more general terms he added there was a healthy appetite by potential foreign investors in Malta.

In July, SmartCity chief executive officer Claudio Grech told The Times Business that progress was "as scheduled and planned". He had reiterated that SmartCity Malta 01, the first office block, would be ready for operation in 2010, providing its business partners with state-of-the-art infrastructure and facilities.

The government has a minority nine per cent shareholding in SmartCity Malta.