The Malta Tourism Authority has an accumulated deficit of over €6 million, including a nearly €500,000 loss incurred last year because of payments related to the Joseph Calleja concert which were never refunded by the government itself, Times of Malta has learnt.

The authority’s financial situation was flagged in its audited accounts for last year, presented as part of the annual report tabled recently in Parliament.

This amount is mostly made up of what the MTA committed and paid for the concert

According to the auditors’ report, the authority incurred a loss of nearly €500,000 representing costs that “had not been budgeted for”. The MTA spent over €40.7 million last year.

MTA chairman Gavin Gulia explained when contacted that this loss was in the form of expenses forked out by the authority for the Joseph Calleja concert last summer and for which a refund was promised but not received.

“This amount is mostly made up of what the MTA committed and paid for the concert according to an agreement between the Malta Tourism Authority, [concert organisers] NnG and the Finance Ministry. Unfortunately the funds from the ministry were not forthcoming during the year 2013 and hence the increase in deficit at year end,” Dr Gulia said.

Contrary to previous annual concerts by the internationally renowned Maltese tenor, the government last year struck a deal with the concert organisers for the standing area to be open to the public free of charge. Tickets for the seated area ranged between €80 and €200. The concert was held on August 1 at the Floriana Granaries. The government had never released details of the financial contribution it made to make up for the loss of income for the organisers.

With regard to the accumulated deficit of over €6 million, Dr Gulia explained that this had been brought down to the present level in 2009 when the previous administration had made an injection of around €4.65 million to partly offset the €10 million deficit which had accumulated until then.

“The overall deficit was reduced during 2009 when the Finance Ministry forwarded the sum of €4.65 million to the MTA to partially offset this amount. Along the years, MTA continued asking the Finance Ministry to forward additional funding to reduce this amount further,” he said.

Dr Gulia did not reply when asked whether the MTA had a financial plan to gradually reduce this accumulated deficit.

The MTA is just one of the government entities with accumulated debt. Enemalta is in a much worse situation as its debt was in the region of €800 million, although this was halved earlier this year when the government struck a deal for the sale of a minority shareholding to Chinese investors.