The government is refusing to publish a memorandum of understanding it signed with the Corinthia Group four years ago as plans for a controversial deal transferring St George’s Bay peninsula to the hotel chain for speculation purposes continue.
In a joint press conference in 2015, Prime Minister Joseph Muscat and Corinthia chairman Alfred Pisani had said the group would be investing €400 million in its three existing hotels in St Julian’s to develop what was described as “an oasis of excellence” in the tourism industry.
No mention of any MOU had been made on that occasion.
The existence of a preliminary agreement surfaced last December, when Tourism Minister Konrad Mizzi briefed the parliamentary National Audit Office Accounts Committee on a draft deed enabling the Corinthia to build apartments and offices for sale on public land allocated to it for tourism purposes only.
Efforts by Times of Malta to obtain a copy of the preliminary agreement proved futile and a request under the Freedom of Information Act has now been made. The government is resisting calls by both the Nationalist and Democratic parties to publish the 2015 MOU.
After the government rejected a call by the PD to “come clean” over the deal, tourism shadow minister Robert Arrigo on Tuesday asked Dr Mizzi to allow MPs to view the MOU but the minister refused. He said the document would be published “later” since the final agreement with the Corinthia was still being negotiated. No dates were mentioned.
When presenting the draft deed to the parliamentary committee a day before Parliament stopped for the Christmas holidays, Dr Mizzi admitted that the parameters of the proposed agreement were based on a similar deal the government had made with the Seabank db Group involving the sale of public land on which the Institute for Tourism Studies stood.
The db Group deal is being investigated by the Auditor General.
The minister wanted the committee to approve the draft deed that same day but Nationalist MPs Beppe Fenech Adami and Mario de Marco objected and insisted the Opposition wanted more time to study the agreement that was changing the parameters of the whole concession given to the group in the 1990s.
According to the still unpublished draft deed, the whole of the St George’s Bay peninsula, considered the most lucrative real estate on the Maltese islands, would be handed over to the Corinthia under a new 99-year temporary emphyteusis.
Times of Malta has reported that, in contrast to the original deed, in which the Corinthia was only allowed to use the public land for tourism purposes, mainly hotels, the government conceded to allow the hotel chain, which has strong foreign shareholding, the possibility to build up to 100,000 square metres of apartments and offices for rent or sale.
In return, Corinthia promised to pay a premium of €17 million for public land, which estate agents estimate would fetch at least €700 million in line with present market prices.
As part of the deal, the hotel chain also promised to upgrade two of its existing hotels there.
In the wake of harsh criticism by the business community, particularly developers and real estate agents, accusing the government of “selling public land for peanuts while distorting the market”, the government decided to re-start negotiations in a bid to mellow the proposed deal and make it more “sellable”.
Sources close to the negotiations described the ongoing talks as “cosmetic” and aimed at eliminating the possibility that the deal would be seen by the EU as breaching state aid rules.
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