The Office of the Prime Minister has defended a memo to ministers penned by Cabinet secretary Mario Cutajar in 2013 justifying the government’s €4.2 million bailout of the Café Premier business.
It was revealed earlier this week that the premises are being allocated to the Valletta local council. But this was not one of the justifications that had been given at the time by Mr Cutajar, among which was the expansion of the National Library that lies above the café.
A government spokesman said however that Mr Cutajar had not misled the Cabinet and that he had acted correctly.
“The prime area (of the Premier) will be returned to the people of Valletta as local council offices, while making better and more sustainable use of the premises, also extending the National Library,” the spokesman said.
According to the OPM, not all of the re-acquired premises will be handed over to the council.
“Part of the premises will be used as an extension for the National Library, since currently it is inaccessible to persons with disability.”
The allocation of Café Premier to the council was revealed in a working document mistakenly published by the Finance Ministry. Although it was withdrawn the day after the Budget was presented to Parliament, Prime Minister Joseph Muscat confirmed the decision.
In his 2013 memo, Mr Cutajar had given a number of reasons for the bailout.
He wrote that the premises were needed in order to remove the danger posed to the National Library from a kitchen located underneath it, while there was also the need to create “vertical circulation” as well as expand the library. The aim was also to solve the problem of arrears owed to the government by the Café Premier operators and to lease spaces for commercial purposes.
Café Premier was reacquired by the government in 2014 after withdrawing a court case against the owners.
The government bailed out its operators, City Entertainment Ltd, for €4.2 million. The payment included the settling of arrears in rent, pending water and electricity bills and taxes owed to the VAT department.
Prime Minister Joseph Muscat was personally involved in the negotiations.
The National Audit Office had harshly criticised the deal.