A challenging restoration project for Fort St Elmo, in Valletta, estimated to cost over €100 million, was launched by the government yesterday as part of the Grand Harbour regeneration project.

The restoration project forms part of the government's vision and, although unable to quantify its total cost, Infrastructure Minister Austin Gatt said it would exceed €100 million, which should come from EU funds.

There is no set timeline for the project and Dr Gatt admitted he could not go into further detail because it is still in its initial phases. The government yesterday announced the master plan and the steering committee appointed to drive it.

The project's greatest challenge was not the fort's restoration but how it would be used once it was ready, he said.

The upper part of Fort St Elmo, at street level, would be opened for public manifestations of a cultural and artistic nature and create a walkway linking the Mediterranean Conference Centre right down to Pinto Stores. The walkway formed part of the government's vision for a promenade from Sliema and round the base of the fort, Dr Gatt said.

The project will also re-route the Valletta ring road covering part of the granaries outside the fort to the ditch.

The historic lighthouse, which had been removed by the British forces before World War II, will be rebuilt at the top of Fort St Elmo.

The government also planned to build a hotel instead of Evans Building, which would cater for activities related to cruise liners and the nearby conference centre, Dr Gatt said.

The project involves the construction of a cruise liner terminal, at a cost of €15 million. The terminal will not be protected by a breakwater and will only be used in good weather.

Although the steering committee looked into the possibility of building two berths and breakwaters, it decided against because of the high cost and environmental impact involved.

The government wanted to restore this jewel but convert it into a destination that worked all year round and this required the commercial aspect to keep it alive, Dr Gatt said.

Describing it as an exciting and challenging project, he explained that St Elmo's restoration would counterbalance the government's plans for City Gate.

The challenge was finding the balance between the commercial and cultural aspect. It was a big challenge but it could be met successfully, Dr Gatt said.