Kuwait City is not as littered with skyscrapers and grandiose edifices as its counterparts in the rest of the Emirates because the country has caught the "Mepa disease", according to the chairman of the giant real estate multinational Al Massaleh Real Estate.

He was joking but only in part because the comment reflected a very real frustration with the fact that the Mistra Heights project - an 868-apartment high-rise complex in Xemxija in which the Kuwaiti company has a stake - remained without a development permit, four years after it was announced.

The €250 million Mistra Heights complex, a joint venture between Maltese developers JPM Brothers and Al Massaleh, represents a fraction of the latter's portfolio but is the first such investment from the region and its fate determines that of other similar projects.

Speaking during a meeting in Kuwait with a Maltese trade delegation this week, the group's chairman, Najeeb Al-Saleh, said that despite a weakening of the Maltese property market in the past two years, the project would still be economically viable.

"The price of property has gone down but the cost of construction has also decreased, so the project remains viable," he said.

The project, meant to replace the former Mistra village, had attracted strong criticism from environmental groups when the Malta Environment and Planning Authority approved a preliminary permit for 11 storeys in 2008.

It was toned down from the original plans, doing away with a proposed 19-storey tower and cutting the units by 100 but environmentalists remained opposed because of the huge impact a high-rise building of the kind would have on the Xemxija ridge.

Then, in March 2009, the project's marketing team was laid off amid rumours the venture had run into financial difficulties and that the local partners were trying to sell off their share to Al Massaleh.

JPM Brothers director Jeffrey Montebello denied the rumours and complained that the project had been stalled by planning bureaucracy.

But Mepa had washed its hands of any responsibility for the delay, pointing out that the developers had only paid the fees for the planning application in the same month the marketing team was laid off.

Mr Al-Saleh acknowledged there were some problems with the local partners but complained about planning bureaucracy and an element of mixed messages.

However, he politely pointed out that even his country suffered from similar problems: "You will notice that here is not as developed as other cities... you see, we got the Mepa disease too but I'm sure we can cure it."

The city has its fair share of high-rise buildings but there is fierce competition in this area among Emirati states.

Vince Farrugia, director general of the Chamber of Small and Medium Enterprise - GRTU, who was present for the meeting, said the government had to address these problems because they had the potential to kill important investments and give Malta a bad name in the region.

He praised the initiative to have a planning strategy unit within the Office of the Prime Minister, stressing it had to come up with a plan investors could refer to as an easy guide to gauge whether developments they were proposing were in line with the Malta's vision.

"Big business cannot afford such sort of hiccups," he said, adding that if Malta wanted to tap into the investment opportunities offered by these countries, the government had to decide what it wanted and be able to communicate it to businessmen clearly.

Asked to react to Mr Al-Saleh's comments, Prime Minister Lawrence Gonzi said the strategic unit would go beyond Mepa, even though planning matters would be an integral part of the formulation of strategy.

"Yes, we need to formulate one strategy that takes into account our economic aims, environmental and planning consideration, among others, and come up with a formula that makes sense without being rigid because the economy does not develop in a straight jacket," he said.

"Mepa is a fundamental partner in all this. Beyond this, however, I hope the reform Bill for the authority, which is before the parliamentary committee responsible for such matters, would be passed through, so we can start implementing those changes that require the House's approval."