Harbour Management Ltd, a consortium which currently operates part of the Ta' Xbiex yacht marina, has signed a 25-year-agreement with the government for the management of the Mgarr yacht marina in Gozo.

Finance Minister Tonio Fenech said there would be an upfront payment of €513,000 and annual rent of €60,000. The rent will increase every five years.

The marina has 200 berths. The company will make an investment of €340,000 over the next years to replace the pontoon and upgrade facilities.

The minister said that if the number of berths is increased, the rent would be increased accordingly.

He said that berthing fees cannot be raised until the investment is done.

"This is another development in the process for Malta to become a centre for excellence in yachting," Mr Fenech said.

Infrastructure Minister Austin Gatt said the marina was set up in 1990 and hardly any investment had been made since.

He said the management of a yacht marina was a commercial activity which the government should not be involved in. He noted that Grand Harbour Marina had been privatised and was doing well. So was the other private marina at Portomaso.

He said the privatisation of Ta Xbiex marina was in an advanced stage. The marina is divided in two concessions and preferred bidders have been selected.