The company which was meant to open a state-of-the art medical centre at Smart City later this year has been served with a final warning by the operators of the technology and business park, who called on it to pay €4.7 million or be declared in default.

Earlier this year, Synesis Limited signed a contract for the purchase of 16,000 square metres of land in Kalkara to build its hospital after it was granted a number of extensions to the original promise of sale agreement. But it has not yet paid for the land.

In a judicial letter issued last month and seen by this newspaper, the company that owns Smart City calls on the directors of Synesis to pay the outstanding amount of €4.7 million or be declared in a state of default.

READ: Smart City flats go on sale before permits have been issued

The owners of Synesis Ltd are also warned that if they don’t pay up within 60 days, the contract signed for the sale of land between SmartCity Malta Ltd and Synesis Ltd will be terminated.

The new private hospital, St. Ioannes Paulus II, was announced by the Prime Minister in 2015 during an official ceremony at Castille. Dr Muscat described the €100 million investment as “another sign of confidence in the government” and said that the Maltese and Italian investors would be providing a centre of medical excellence in the Mediterranean.

The hospital is meant to be up and running by the end of this year.

Asked to state whether the company has some kind of financial problem and to explain why it has not managed to pay its dues, the company insisted “the hospital is on track” and that “all the required funding has been concluded”.

A company spokesman said: “The St Ioannes Paulus II Project, which, in partnership with a major international player in healthcare will be a showcase centre of medical excellence at Smart City Malta, is proceeding as anticipated. It is envisaged that works on site will commence shortly.”

The project is proceeding as anticipated. It is envisaged that works will commence shortly

The hospital project is managed by Synesis shareholder Steve Carter, who also sits on the board of directors of Ricasoli Properties Ltd (RPL), a company which recently entered into another promise of sale agreement to buy land at Smart City.

Ricasoli Properties’ shareholders are not the same as those behind the hospital project, but Mr Carter is also the main mover behind the former’s 400 luxury apartments being marketed by RPL through various estate agents.

The Times of Malta reported that following the sale of land for the building of the hospital, the operators of Smart City entered into a promise of sale agreement to sell another part of the land to be turned into a massive residential and commercial centre.

Smart City has so far failed to disclose the sum involved in the transaction with Ricasoli Properties Ltd and to answer questions about whether the residential and shopping complex is in line with the original master plan for the park.

No permits have been issued by the Planning Authority but the apartments, in a block called The Shoreline, are already being sold on plan.

On its part, the operating company of Smart City also has its fair share of problems. In its latest published accounts (2016) it admitted it was not adhering to its contractual obligations and The Sunday Times of Malta revealed the government is not imposing the fines that should be due as a result, to protect taxpayers’ interests. These fines would amount to hundreds of thousands of euros.

The government has not replied to questions on the matter.

According to the 2007 contract, some 300,000 square metres of land in Kalkara were given over to Smart City at 50 cents per square metre per year on the condition the land is used to develop an ICT and media village. The company appears to have departed somewhat from that original plan.

The government, which holds a 10 per cent shareholding in Smart City, is represented on its board by Keith Schembri, the Prime Minister’s chief of staff.

The Democratic Party has called for an investigation by the Auditor General so that “the people’s land is returned to its owners”.