Watch: Manoel Island developers breached concession agreement, Abela says

The Manoel Island developers breached the public land concession agreement by failing to observe project completion timelines, the prime minister said on Monday.

Robert Abela said the government would consider an out-of-court settlement that would see the site "returned to the people".

"It is my belief that the contract conditions were breached," Abela told journalists outside parliament, adding that there were also other potential contract breaches.

His comments come hours after MIDI said in a company announcement that it was committed to finding a solution that could return Manoel Island to government hands.

 Abela said a three-year extension against a penalty was given in 2023, and this means a substantial part of the project was meant to be completed by now, which is physically impossible.

The prime minister said he hoped that a solution would be reached that would avoid court action, acknowledging that such a matter would take several years to conclude.   

"If a fair solution isn’t found around the table, the next step would be the tabling of a procedure to rescind the concession," he said, but he preferred a way that would see the transformation of Manoel Island into a park proceed quickly.

Asked whether the government was prepared to compensate the developers if the Manoel Island development did not proceed, Abela said he saw no legal obligation to do so if contract conditions were breached.

But he said there could be a moral obligation, particularly the 500 or so bondholders, mostly pensioners. The government, he said, was certainly not prepared to pay millions.

He also pointed out that Midi had already profited greatly from the concession agreement. The MIDI consortium was granted a 99-year concession in 2000 to develop luxury apartments on both Manoel Island and Tigné Point.

The "exaggerated" and unsustainable development on Tigne' Point was nothing like the development brief issued before the deal, or the outline development permit, he pointed out. The group had taken everything that it could from the site. 

"The consortium needs to understand that with Manoel Island they cannot make money,” he said.

Referring to the Midi company announcement issued on Sunday, he said the consortium appeared to be realising that the people deserved a relaxing environment on Manoel Island.   

The dramatic developments take place after a petition demanding that Manoel Island is turned into a public park garnered around 29,000 signatures. 

Both Abela and the Opposition leader Bernard Grech initially said nothing could be done with a contract in place before both changed their position.