The government rejected a request to publish the memorandum of understanding it signed with the Corinthia Group four years ago, arguing it contained “trade secrets”.
Read: Corinthia MOU signed in 2015 remains hidden
The request was made by Times of Malta in terms of the Freedom of Information Act, but the Tourism Ministry said the document was “commercially sensitive” and its details could not be divulged.
The newspaper has filed a complaint on the ministry’s denial, arguing the contents of the agreement were in the public interest since it was about valuable public land being transferred to the private sector under new conditions.
The agreement had been signed in 2015 but its existence only became public last December when Tourism Minister Konrad Mizzi asked Parliament’s National Audit Office Accounts Committee to approve a new deal with the hotel chain.
Dr Mizzi had planned to obtain approval during the same session, a day before the House rose for the Christmas recess, but Opposition MPs insisted on more time.
Contents of the agreement are in the public interest
The new agreement proposed that, in contrast with a previous deal under which Corinthia could use public land on St George’s Bay peninsula for tourism purposes, 100,000 square metres of apartments and offices for speculation could be built. In return, Corinthia would upgrade two of their three hotels there and pay a €17 million premium over a number of years.
Estate agents had put the current market value of the land in question at about €700 million.
The controversial deal was shot down by the Opposition and a number of NGOs and business organisations criticised it, accusing the government of selling the island on the cheap.
A private consortium of developers sent a legal letter to the government, making it clear that if the deal went ahead it was likely to be accused of violating State aid provisions.
In a move to try to unblock the impasse and avoid further criticism, the government announced it would revisit the original proposal, adding that talks on a new deal would commence. The original proposal was officially withdrawn from Parliament and no date has yet been given as to when a new draft agreement will be presented.
In 2015, Prime Minister Joseph Muscat and Corinthia chairman Alfred Pisani had announced a €400 million investment in the group’s three existing hotels. No mention of an MOU or a concession agreement had been made then and the project they had spoken about never took off.
Defending the proposed deal, Dr Mizzi said the terms granted to Corinthia were identical to those given to the Seabank db Group for the site where the Institute for Tourism Studies used to stand. That deal, through which 25,000 square metres of prime land were effectively sold for €15 million, is being investigated by the National Audit Office.