The Government is paying €10,000 a day in fines instead of an equivalent amount in rent for the still unfinished parliament building.
The project was meant to have been finished in December but will only be completed in June, when it is expected to be passed on to Malita Investments. This is the investment company that holds legal title to the City Gate project and is 80 per cent owned by the Government.
Malita chairman Kenneth Farrugia said the company was meant to have started receiving rents from the Government for the parliament and open air theatre in January, after the project was handed over.
However, given the missed deadline, Malita is receiving the penalty in lieu of the rent, which is of a similar amount. “The Government has accepted and will be paying a penalty of €10,000 per day for the parliament building and €4,200 daily for the open theatre after the December deadline was missed,” he said.
The news emerged yesterday during the 2012 annual results presentation of Malita.
The board of directors said they were recommending a net dividend of 1c6 per share for members of the public who had taken up shares in the company, which was created in 2011 to finance public projects.
The Government gave the company legal title over the parliament building and open theatre and will be leasing back the properties for its own use.
Lease payments owed to the Government by Malta International Airport and the Valletta Cruise Port terminal were also diverted to Malita.
Malita is listed on the Stock Exchange and 20 per cent of its shareholding, worth some €15 million, was sold to members of the public.
These shareholders will receive the dividend in April after Malita registered a profit of €1.4 million in its first full year of operation.
The company’s total assets increased to €147.2 million from €97.2 million as a result of the public deeds related to the City Gate project, MIA and the cruise passenger terminal in Valletta. Malita received ground rents of €1.4 million from MIA and the cruise terminal.
Mr Farrugia noted that Malita had secured a €40 million loan from the European Investment Bank at a fixed rate of around 3.3 per cent for a 25-year duration.
He said the favourable interest rate, which was well below commercial rates, will in the long run save the Government millions of euro. The loan was taken to finance half the cost of City Gate.
Outlining the firm’s philosophy, Mr Farrugia said Malita will invest in projects of strategic national importance such as regenerating Grand Harbour, the Valletta city of culture activities in 2018 and alternative energy projects.
Another area of investment will be tourism with particular emphasis on the rehabilitation of national heritage sites.
Mr Farrugia said the company will eventually also diversify into real estate projects that can be of a commercial, residential or mixed use nature.
He did not exclude that Malita will be investing in real estate projects proposed by the private sector.
“There may be projects of national importance, such as the urban regeneration of Valletta.”
ksansone@timesofmalta.com