The government will be forking out compensation to some owners of shops under the City Gate arcades, in Valletta, whose new outlets still need refurbishment work, their representative has told The Times.

Not all the shop owners will find their alternative location ready by the time they have to move out on Saturday, according to Reginald Fava, from the Chamber of Commerce, Enterprise and Industry.

As a result, the government will pay them compensation for the slight "handicap" caused by the delay until they can continue operating normally, said Mr Fava, who is representing 12 of the 14 tenants.

A spokesman for the Land Department refused to comment about compensation, saying only that "the government was committed to find a solution for the situation".

Mr Fava did not divulge any details about how many tenants would have to wait but said they were all happy with their new locations in Valletta, which had been agreed upon after months of "cooperative and fair" discussions with the government.

The shops owners will have to hand over the keys to the government by Saturday as demolition works on the arcades in Freedom Square, for the Valletta regeneration project, start on April 1.

The plans for the square do not include the shops and the owners have been in discussions with the Land Department for months.

Two weeks ago, Land Parliamentary Secretary Jason Azzopardi said the government had found a number of alternative locations in Melita, Old Bakery and Merchant streets, in the capital city.

Although Mr Fava did not disclose the specific locations, he stressed all the tenants were happy with the new arrangements.

"All are happy - except for me as the government has not yet given me a temporary licence to operate my pharmacy (Chemimart) from an alternative location," he said.

In fact, Mr Fava yesterday filed a judicial protest against the government and the Medical Authority for not replying to his request for a temporary licence to move to another outlet he owns in Republic Street.