Doubts shroud undersea resort ship project

It is not possible for the Malta Shipyards to move forward on a proposal by the US-based Cala Corporation to construct the first Undersea Resort Ship in history unless it is assured that the project is technically achievable, Malta Shipyards chief executive officer Chris Bell said yesterday.

And Mr Bell said that even if it were a technically achievable project, the financial issues would still have to be addressed before any progress could be made.

On Friday, the Cala Corporation, which trades under the name CCAA, said it had submitted its proposal for the resort ship to top naval engineers in Malta about six weeks ago. This proposal, the corporation's legal adviser said yesterday, could lead to contracts worth $3 billion.

Cala's legal representative in Malta, Matthew Frendo, said Cala Corporation's plan was to manufacture the undersea resorts and sell them.

He said it has been engaged with one of the best real estate agencies in the world dealing with "clients worth millions of dollars".

However, the government expressed reservations about the project late last year, saying no serious proof of financial standing and due diligence was presented by the company. Mr Bell said yesterday that this was a concern.

But Dr Frendo said Cala's bankers made it clear that they would deliver the funds if the corporation entered into an agreement with a shipyard to build the ship or if it entered into an agreement to buy a shipyard.

Yet Mr Bell also said that Cala's proposal to lease the Marsa Shipyard is misleading.

"If it is not considered technically feasible at this stage to build the project at the Marsa site, and given the statement regarding their alternative option, it seems extremely unlikely.

"Certainly Malta Shipyards is not in discussions with Cala on this subject. (Owner) Mr (Joseph) Cala and his representatives have previously stressed in the meeting and other correspondence that to lease or own the facility is not their intent."

Such statements, Mr Bell said, could damage viable commercial negotiations taking place with other companies.

Malta Shipyards had proposed a non-disclosure agreement between the companies to prevent such damage and this initiative was accepted during the meeting in Malta by Mr Cala. The agreement has since been sent to Mr Cala but not returned, Mr Bell said.

Mr Bell said that Mr Cala and his naval designer, Ray Francis, visited Malta and the shipyards, with the support of Malta Enterprise, to discuss the possibility of constructing the resort.

However, the proposed financial backer, who was also supposed to visit, did not turn up.

He also said Malta Shipyards had received limited design information from Cala to identify the potential of carrying out the construction at the Marsa site.

It also emerged yesterday that the corporation had, some three weeks ago, submitted a proposal to build "the first undersea resort ships" to Northrop Grumman Ship Systems' top naval engineers in Avondale, Louisiana, in the US.