A group of unknown business owners calling itself ‘Foresite’ has written to MPs and warned that a planned deal with the Corinthia Group would violate EU state aid and public procurement laws, the government said in a statement on Friday.

The anonymous letter was addressed to all Members of Parliament and stated that it was penned by a group of business operators.

Foresite argued that the St Julian’s peninsula deal would give International Hotel Investments – Corinthia’s parent company - an illegal advantage and would exclude other potentially interested developers from the land development project.

Times of Malta has reported that the international hotel chain is set to receive the rights to build a six-star hotel as well as luxury retail and residential units on the peninsula for just €17 million, despite experts valuating the project at around €700m in value.

Corinthia is planning to build 100,000 square metres of commercial and residential real estate and offices, including high-rise blocks.

Times of Malta had reported earlier this month that the government had reopened talks with the Corinthia Group after it received legal advice that the project, as proposed, would violate EU state aid rules.

The government had vehemently denied that was the case.

In its statement, the government said that talks concerning the project were still ongoing but that it would “clearly” not enter into any transaction which its advisors believed was “not consistent with Maltese or EU laws”.

MPs would also be discussing the project in parliament, it added.

News of the Corinthia Group project first broke late last year, when the government discussed it during the last parliamentary sitting of the year, only to subsequently debate it in detail after the Opposition insisted that the plans had to be debated in full.

Prime Minister Joseph Muscat has made no secret that he approves of the Corinthia Group’s plans, telling an audience on Sunday that the project would be a “giant leap” for Malta’s tourism sector and was needed if the country was to attract high-paying tourists willing to fork out thousands of euros a night.

In its statement on Friday, the government said that IHI would also be spending large amounts of money on the investment, with significantly direct and indirect income for the government, and creating tangible benefits to Malta.

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