The government has agreed to grant a large area of public land in Marsa to a group of private businessmen, and convert it into a nine-storey commercial complex as part of the privatisation of the Marsa horse racing track.
The draft concession agreement, seen by Times of Malta, states that the commercial complex will have more than 12,000 square metres of rental space to be used for offices, retail outlets and restaurants, among others.
The complex will also include a large commercial car park, while the bus park already on site should also be allocated space in the new complex.
The land in question, which is currently used by Malta Public Transport as a bus park, will be transferred for 65 years to the private investors. The land was not included in the original request for proposals (RFP) and a memorandum of understanding signed between the government and the private consortium in 2017 shortly before the last general election.
The deal, which the government is now pushing through parliament, may be illegal, according to legal sources.
It has been a long time since we concluded this deal and I don’t have the details here
“It is clear from maps forming part of the RFP and the memorandum of understanding that the new public land inserted in the deal was not the same in the original offer,” the source said.
This means that the terms of the original RFP were changed and this may be challenged in court.
During a meeting of parliament’s National Audit Office Account Committee held earlier this week, Opposition MPs Mario de Marco and Ryan Callus raised several questions on the terms of the concession presented by the government, including the area to be turned into a commercial complex.
The inclusion of the large area of public land, located in Marsa, bordering with Qormi, to be turned into a commercial complex will make a significant difference to the project investors.
Originally, the RFP said investors would have to raise profits from the management and operation of the new track and related horse-racing facilities only.
The government’s project to try to privatise the Marsa horse racing track goes back to 2015 when a Request for Proposals was published by the Privatisation Unit.
Only one offer was submitted, and just a few days before the June 2017 election, Prime Minister Joseph Muscat announced a memorandum of understanding with Marsa Race Track Ltd, to invest €18 million in a new track and facilities.
Commercial activity concession had been excluded
A representative of the investors, lawyer Pio Valletta, had excluded the possibility that the concession would be used for any kind of real estate, declaring that any commercial activity included in the deal was only related to equestrian sports.
However, according to a draft deal, already made between the government and the private company, it results that real estate has now been included as part of the project. During the parliamentary committee meeting, a representative of the polo club, which currently also uses the race- track, told MPs there is no agreement between them and the private consortium, claiming that the government did not do anything to protect their sport.
On the Opposition’s request, Deputy Prime Minister Chris Fearne, who was chairing the meeting, postponed the meeting to ensure the privatisation unit and other government agencies can provide more information and clarifications.
In April 2018, Times of Malta had reported that the private investors were putting pressure on the government to grant them public land, outside the terms of the RFP, to turn it into a commercial office block.
Manuel Camilleri, the chairman of the government’s Privatisation Unit, which negotiated the terms of the concession agreement, could not tell parliament who were the investors behind the project.
“It has been a long time since we concluded this deal and I don’t have the details here,” he told the parliamentary committee scrutinising the contract.
Who are the investors?
Marsa Horse Racing Track Ltd is formed of a group of businessmen, mostly foreign.
The majority shareholder is Hugh Morshead, a UK citizen who lives in Jersey and who is also one of the main directors of Henley & Partners – the company which sells Maltese passports. He holds 72 per cent of the company’s shares.
Registered in 2017, the company also has True to Type Limited, an Irish company with a 10 per cent shareholding.
The other shareholders are Alfred Kenneth Alexander Hill, Kusam Sharma, Pio Valletta and local construction contractors F. Schembri Holdings Ltd, known as Tad-Dobbu.