IT and Investments Minister Austin Gatt was in buoyant mood last week when he announced that Dubai-based Tecom Investments, which operates Dubai Internet City, is to invest Lm110 million in a similar project in Malta.

Steve Mallia found out how it would all work out.

Who came up with the idea to get in touch with Tecom?

Various people. They were an obvious target for one basic reason: since 2000 we've been promoting Malta as a centre of excellence for ICT but we knew the presence of big multinationals here was missing. So, the question was who could be a flag bearer and it was either one of the multinationals or someone who can attract multinationals and here the Dubai Internet Centre came into play immediately. If anyone had to be given the paternity for the idea, it's Claudio Grech more than anyone else.

Have you met the Tecom representatives?

I have met the project director who is an Indian.

In Dubai or Malta?

No, I haven't gone to Dubai yet. My people have gone to Dubai a number of times. They are there this evening (last Wednesday) with the lawyers.

Doing what?

Finalising the heads of agreement. What we have at the moment is a framework agreement that has been transmitted over fax. Now we're taking up our lawyers, so we will be converting the framework into a legally binding heads of agreement document that we will hopefully conclude by the end of next week. I've met the project director, though I was abroad when the CEO came to Malta.

There's been some criticism that you made such a huge announcement before the heads of agreement were signed...

...The statement was agreed with them. We issued it here and they issued it internationally. We could have waited till the heads of agreement but in reality there was a lot of talk going on here... since the framework agreement was agreed, we thought we'd better give out the information directly than be caught out by the press.

Which day next week do you expect the agreement to be signed?

Definitely next week. But since lawyers are involved - well, they will always take longer than politicians.

Have the investors been in touch with any building contractors over this project?

No, absolutely not.

So isn't it super optimistic that a project like this can open by 2008?

Not really. They are basing themselves on how they operate in Dubai and for them two years is a long time.

But in Malta short stretches of road cannot be built in two years.

It does not necessarily follow that they only have to work with Maltese contractors. They can get contractors from abroad as well. It is not unheard of in this country; look at Skanska for example.

And that will be entirely their choice?

Absolutely. It's their money, so it should be their choice.

Don't you feel you're setting up yourself for a fall by announcing that this project will open in 2008 when there are so many variables?

This is the timeline we have agreed with them. Eventually we will have specific timelines in the contract. They are prepared to go for this. It might be delayed - God knows what can happen until that time - but since they're agreeing that we should target 2008 as the start, I'm merely repeating what has been agreed.

And you pushed for 2008 because there's likely to be a general election.

There's going to be an election in 2008. It's possible that it will be in 2007 but I would say it's more likely to be in 2008.

I have already said I would like it to open before the election for obvious reasons but I am not sure I can guarantee that!

When an announcement of this nature is made in various other EU countries, people welcome it. Here some people treated it with scepticism. Is it Austin Gatt with the credibility problem or the government?

The only comment that was made in this respect came from the opposition, which is more sour grapes than anything else. They said that Austin Gatt has no credibility because of the Gama announcement.

I have said it and will say it again: I made the Gama announcement because the Austrian investors asked me to do it, specifically because at the time they said the employees of Denim Services were looking for another job and they wanted to recruit them rather than have to retrain others.

Wasn't that a mistake in retrospect?

No. I stuck my neck out well knowing the investment may not well be made, but you have to take risks. If you just sit back...

...at the expense of your credibility?

Even if it's at the expense of my credibility - if it achieves something that's worthwhile at that point in time, then yes. If Gama wanted it at that time and at that time we did not have the problems that came later, then I had to take a risk. Why shouldn't I take a risk?

But don't you think, therefore, that people are justified in calling you not credible if you make such a statement?

No. I think people have to realise that in this business you will not get any investment if you adopt a no-risk policy. Sometimes you're going to get it right, and sometimes you won't get it so right.

How can people be so sure this time that you're not taking a risk that's going to fall apart?

Eventually we will find out if the contract happens or doesn't happen.

Is it going to happen?

I'm pretty sure it will.

Not definite.

If one's going to be black and white, it's not definite... Technically you should wait for the heads of agreement. Technically you should wait till you have the parliamentary resolution that will happen in June. What should a government or minister do - let the papers publish uninformed stories in the meantime and make no comment?

You came out with very definitive statements talking about a precise number of jobs...

...everything in the statement has been agreed with them.

You talked of a permanent unit that's going to be set up in order to speed things up when companies want to come here. Who's going to be in that?

It will have representation from the 11 sectors which big investors normally come into contact with - like income tax, VAT, national insurance and social services, ETC, visas, customs, immigration...

Who's going to head it?

It's something we still have to look at.

Is it going to be under your control or someone else's?

It hasn't been decided yet. We don't need to set it up tomorrow.

What kind of clout is it going to have?

The idea is that we have a facilitator with the various authorities and departments to ensure that turnaround for applications takes no longer than 10 days.

Is the head going to have more say than the heads of these authorities and departments?

No. Absolutely not. It's a question of facilitating. If you have a request, you have to respond to it positively or negatively within 10 days.

So in spite of the permanent unit, investors are still going to be dependent on all these other departments.

It should be that way because if a foreigner applies, for example, for a driving licence and he's not 18 you shouldn't give it to him.

So there's still a risk that...

...It's not a matter of risk. It's ensuring that you have replied. No investor would expect to be able to operate outside the confines of local legislation. The point is that he should not wait longer than 10 days for a reply.

You've mentioned that the government is going to have some sort of stake in Smart City. What will that be in percentage terms?

We're still negotiating.

What's it likely to be?

Subject to negotiation.

Ten per cent?

Subject to negotiation... It should be about five or 10, let's put it that way.

You've also mentioned that 5,600 jobs are to be created. Some 3,600 will be knowledge-based...

...around 65 per cent will be ICT to be more precise.

Given that Malta isn't in a good position at the moment to supply those jobs, don't you think there's a big possibility that any multinational company that might end up coming here would seek to employ workers from other EU countries?

First, we have time to gear up for this because the jobs will be created between 2008 and 2016. As of today, we are definitely not in a position to supply 3,600 jobs. I doubt there is a country anywhere in the world which on its own can supply all these jobs in one go.

Two, yes there is a possibility, even in 2016, that multinationals will import people.

Third, I would even go as far as saying that I would want a part of that workforce to be foreign because it would be damaging to be insular in this field. The generation and mixing of ideas and development is extremely important and the worst thing that can happen to us in ICT is to create a fortress mentality.

So, having half the workforce being Maltese and half foreign would be more than ideal as long as we keep churning out our own. But we have an opportunity now and we should seize it.

In the last five years, we have doubled the number of people graduating from MCAST and the university. Up to 2016 we should be able to increase that tenfold.

But the reality that a number of foreign workers will be here takes the shine off the figure.

Look at the reality today: there is a lot of demand for ICT personnel, even in Malta. You do have foreigners coming to work here. We're still meeting demand as well from our educational establishments... I see no problem with qualified Maltese finding work in ICT.

You mentioned that you beat off competition from other countries. Who were they?

I wouldn't like to mention them.

Do you think that once they've opened in Malta Tecom won't look at opening a Smart City somewhere nearby?

We will have an exclusivity agreement, for a period of time obviously.

Will that have a geographic boundary?

Yes - Mediterranean and southern Europe.

Given that multinationals already have a strong base in Europe, why should they come here?

One of the attractions is that the next unopened continent is Africa. Southern Europe is not so ICT dominated, so the markets are there. Today you have a lot or regional hubs... but there is a whole region from central Europe downwards and Africa where the hub is not there. I think they've seen this opportunity and were looking at establishing a connection between Dubai and Europe... more than anything else I think it's business sense that drove the project.

Alfred Sant has repeatedly said he's been contacted informally by the investors in this project. Are you denying this is true?

I am not denying that... If Dr Sant is saying so, I obviously believe that someone contacted him. My problem is that since the project leader is saying - and I have it in writing - that no one from their end contacted him or the Labour Party, there might be someone saying he is representing the investors when he's not, so Dr Sant might be being taken for a ride by this person.

You're playing with words. Implicitly you're saying that...

...no, it's not his fault. He's believing this person that's misrepresenting himself.

So does that mean he is foolish?

...no, absolutely not...

... or that he's not telling the truth?

...what I offered is that he tells me who this person is so I can check with the Dubai people to ensure that the credentials are right - because it might be happening behind their back as well... As far as the fact itself is concerned, I have no problem with them briefing him. I am ready to brief him myself, or any person he would like, and I appreciate and would like to restate that the Labour Party has, after initially attacking the project, now made a 360-degree turn and is in favour of the project. I think this is what's most important.

So Dr Sant is either being taken for a ride or is not telling the truth.

I suspect he's being taken for a ride by someone.

Is the privatisation of Maltacom connected with this deal?

No, absolutely not. The people involved are totally different. The timescales were totally different. People who are dealing with this deal are not dealing with this privatisation...

So the Dubai connection is not related to Tecom or one of its subsidiaries.

In what sense? Tecom is in Dubai.

Yes, but the Dubai interest in Maltacom is...

...I am not confirming or denying that there is a Dubai interest in Maltacom.

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