Giant global hospitality chain Hard Rock will pay just €2 million of the €300 million the new St George’s Bay development will cost, the Times of Malta has learnt.
A Hard Rock hotel was flagged as a main attraction by the DB Group in promoting its megaproject on the site where the Institute of Tourism Studies once stood.
According to marketing materials, the project will include a high-end Hard Rock casino, however this newspaper was informed that the Malta Gaming Authority had so far issued no such permit.
An economic impact assessment by audit firm KPMG to gauge the financial contribution the new development will make to the Maltese economy found that the only foreign direct investment into the hotel project would be minimal because the Hard Rock group had only agreed to fork out €2 million, financial services industry sources said.
Read: 300m St George's Bay project will give Malta 'most sophisticated place to go'
According to the KPMG study, the casino will generate over 4,000 visits from hotel guests and an additional 300 other visitors a day consisting of both locals and foreign patrons.
The sources commented they could not understand how such assumptions could be made when there was no guarantee a casino licence would be issued. “Casino licences are very complex matters and will take a lot of time to conclude,” the sources noted.
“We just cannot understand how the DB Group knows it will get a casino licence when this would require a competitive process open to other companies too,” they added.
Licences are very complex matters
The 24,000 square metres of prime land in St Julian’s in the area known as the Golden Mile was awarded to the group by the government following a call for tenders. The terms of the deal were harshly criticised, including by the Nationalist Party, the Malta Hotels and Restaurants Association, the Chamber of Commerce, Enterprise and Industry and the Malta Developers’ Association.
A government study on Pace-ville put a price tag of €200 million on the site in question but the DB Group got it for €15 million on very favourable payment terms.
The deal is being probed by the National Audit Office.
KMPG noted in its economic assessment the DB Group was planning to rake in tens of millions of euros from the development, which will also include a 37-storey residential tower, the apartments being sold at between €1 million and €2.5 million.
The project is awaiting the Planning Authority’s green light. It has already attracted thousands of objections, particularly from residents in the Pembroke and Swieqi areas, who accuse the government of allowing the deve-lopers to “bury them alive”.
The Church’s Environment Commission condemned the project and sent a protest letter to the chairman of Hard Rock International in the US asking for a rethink of the development.
A commission spokesman said Hard Rock had not replied.
ivan.camilleri@timesofmalta.com