New schools could not be built for the time being because there were no funds to repay a €73 million loan taken by the Foundation for Tomorrow’s Schools, an Education Ministry spokesman said.
Education Minister Evarist Bartolo said last week there were no funds to build new schools and his ministry would focus on the maintenance of existing ones.
When asked why this was the case, a spokesman said: “Upon assuming the responsibility of the Education Ministry, a preliminary evaluation of the strategy underpinning the operations of the Foundation for Tomorrow’s Schools was made.
The development of new schools was taking place without any structured long-term financing plan and strategy
“Unfortunately, it has been ascertained that the development of new schools, including the Malta College of Arts, Science and Technology, and the refurbishment and modernisation of existing ones were taking place without any structured long-term financing plan and strategy.”
At the time, the foundation was chaired by Ray Fenech who this week was appointed chairman of Air Malta.
When contacted, Mr Fenech said all arrangements made by the foundation were endorsed by the Finance Ministry and covered by a government guarantee.
“All projects… were covered by financial back-up from the Ministry of Finance. As chairman of FTS, I always did things correctly and we were always within the budgets established. Our financial arrangements were always endorsed by the Ministry of Finance. All projects were within budget and there have been savings on certain projects,” Mr Fenech said.
The Education Ministry spokesman said the ministry had established that the foundation, owned by the Government, had taken a €73 million temporary bridging loan from a local bank, “the repayment of which is due by, latest, January 2014”.
There were “no feasible sources of repayment in place” for this to happen, he said.
The Government allocated about €6 million a year for the building of schools but the bulk went to cover interest on the loan.
The spokesman said that €59 million of the amount had been used for the construction of six schools and part of Mcast between 2006 and 2012.
“No financing is available for projects earmarked for the years 2014 to 2020, amounting to about €60 million,” the spokesman said.
He added that the Government was committed to ensure it would find a way to build new schools and modernise existing ones.
“The Government will not allow this policy of the previous government to ‘spend today for others to pay later’ to derail it from its electoral pledges. Rather, this increases the determination of the ministry to find proper solutions where the school infrastructure can continue to be improved and maintained within a sustainable framework,” he said.