The government is close to reaching an agreement with a Dubai-based company that will build an IT village at Ricasoli industrial estate employing 5,600 people in the biggest private foreign investment project Malta has ever seen.
IT and Investments Minister Austin Gatt announced yesterday that Tecom Investments will invest about Lm110 million in the project, which will be known as SmartCity@Malta.
The project will be modelled on Dubai Internet City (DIC), which is a strategic base for 700 IT companies - that include giants like Microsoft, HP, IBM, Dell, Siemens, Canon, Sony Ericsson and Cisco - targeting nearby markets. Built in 2000, DIC provides a one-stop-shop environment for a variety of services required for setting up and running a business. Tecom Investments was set up by the Dubai government to develop and operate DIC as well as being a leading telecommunications network operator and service provider.
Dr Gatt said the heads of agreement for SmartCity are to be signed next month and the detailed agreement between the government and Tecom will be presented to Parliament in May. Work on the project will start immediately with a view to opening in 2008. Within eight years, some 3,600 knowledge-based jobs and 2,000 ancillary posts will be created.
The government opened discussions with Tecom about 10 months ago and beat off competition from four or five other countries. Dr Gatt said: "Malta is the first country in the EU to benefit from this investment... This will have a massive effect on the economy, both directly and indirectly".
The government hopes that SmartCity will become the European outpost for global ICT or media companies that want to establish a presence in Europe.
The minister said that ensuring there are enough personnel to fill the IT posts that will be created at SmartCity was a challenge for the educational base in Malta. "But we are confident that by then we will meet this challenge."
To ensure that the country maximises the benefits of this new project, the ministry will carry out a broad consultation process involving all the stakeholders, including local councils, in the coming months.
Dr Gatt insisted that bureaucracy could not be permitted to stall this project, and the Cabinet has approved the setting up of a permanent unit, which will happen in the coming days, to ensure things get moving and remain that way. "In Dubai, a foreign company can start operating within 10 days. The Maltese government must meet that challenge."
Riscasoli, which is currently a dilapidated area, will be completely redeveloped to comprise buildings for ICT developers, a hotel and recreational facilities and a campus area. "The whole area will be regenerated - from roads to landscaping - and everyone will have access to it," Dr Gatt said.
This area was chosen ahead of Pembroke, the minister said, as it was run-down and because the government wanted to make a political statement that a transformation should take place in the middle of Malta. "Everyone benefits from this, but particularly the people that live there."
He stressed that the government is making no financial contribution to the project - it is just supplying the land - and therefore there was no risk.
On the contrary, the minister said, the government would have a small stake in SmartCity and gain revenue from the participating companies through taxes and spill-over profits.
The minister said this project was a clear indication that foreign investors wanted to inject their money into industries that were relevant in today's world rather than low-paying factories.
Dr Gatt said the government had taken advantage of a void in the EU and was making Malta the place to invest in technology. "Back in 2000, we had a vision to make the island a centre of technology. Today we are reaping the seeds we sowed."