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‘You don’t need cash to make good deals’

He has set up numerous businesses and in his personal or public roles has worked with or under five prime ministers over the past 50 years. But even though he has strong opinions and many stories to tell, he rarely gives interviews. Albert Mizzi talks to Steve Mallia.

There are businessmen who drive fancy cars, businessmen who wear flashy clothes, and businessmen who bask in the ostentatious glory of the media spotlight. Then there is Albert Mizzi. The man, who is not very arguably Malta’s most successful entrepreneur, can by his own admission afford a Rolls Royce, but for years has driven around in a weather-beaten Volkswagen. “I’m not interested in cars,” he says. “As long as they have four wheels and are comfortable, I couldn’t care less.”

For me politicians, at least many of them, are the most dishonest people in this world

Nor does he pay much attention to public relations. If you attempt to look up interviews with him, as I did before our meeting at one of his offices on Manoel Island, you will find very few. And the ones that do exist tend to be related to specific projects, most notably Midi’s developments. “I’ve always kept a low profile,” he happily admits, which loosely translated means he just doesn’t like doing them.

Yet at 84, when most men his age have long worn out the heels of their slippers, he still maintains a very visible presence in the business world – being chairman of at least nine entities, including the Midi group, Mizzi Associated Enterprises, HSBC Malta, Plaza Centre plc, Mellieħa Bay Hotel, Consolidated Biscuits Company Ltd and Supermarkets (1960) Ltd.

The obvious question is, why is he still so active? “Because I love it. I get up in the morning and look forward to going to work. I don’t work for money because I’ve made my money... However, unlike 30 or 40 years ago, these days I don’t really do anything. I just discuss issues and take decisions.”

The last statement would be ironic if it wasn’t Mr Mizzi making it. But he goes on to explain anyway: “Today I’m not involved in the day-to-day operations. The group has grown, we’ve got good managers, and my son, Alec, has been chief executive for some 20 years. I’ve got good people who get results, so I let them get on with it.”

Then he enunciates a philosophy which resonates throughout our hour-long encounter. “I enjoy creating things. With partners, of course. Once they’re running properly, I move out.”

The years, as the self-labelled “old timer” puts it, have by any standard been long. After attending St Aloysius’ College during the war years, he was thinking of studying medicine or law, when his father, who ran a growing foodstuffs business, suddenly had a heart attack.

So at 19 the fledgling entrepreneur joined Alf Mizzi and sons. When it had grown to a sufficient level (today it is Malta’s biggest food importer) and after other members of his family joined, he decided to start branching out into property.

“However, anything I did went back into the group. I didn’t do it for myself,” he is quick to point out. He also stresses that he developed with partners and set about building contacts all over the world because, as the stock phrase goes, “in business it’s not what you know, but who you know”. But he then makes a much less conventional statement: “You don’t need money to go into business. Once you have a good project and it makes sense, you’ll find the backing from wherever you want. Partners are vital. The pleasure for me was that I did a lot of things without having the money to do them.”

He cites Santa Marija Estate, his first major project in the early 1960s, as a case in point. Before granting planning permission, the government insisted that the company install services such as water and electricity as well as building the roads.

“We didn’t have the money, so we set up an office with our partners in London and advertised plots in the Daily Mail and Daily Express – €233 down and €116 a week, or a month, depending on what we agreed. And through that we raised €582,000, with which we started building the roads and services.”

The pleasure for me was that I did a lot of things without having the money to do them

After a guarded start to the interview, Mr Mizzi is suddenly in his element, recounting past acquisitions with boyish enthusiasm. When the foreign owner of the as yet unbuilt Mellieħa Bay Hotel encountered health difficulties, Mr Mizzi called him in Jersey and asked if he was prepared to sell. The answer was yes, but on one condition: that he also bought two stores-worth of aluminium apertures for the hotel. The deal was done, but once again Mr Mizzi and his partners did not have enough money to complete the project.

“Through my contacts we got in touch with an architect in London, Raglan Squire, who had just finished the Hilton in Tehran, and asked if he was prepared to design the hotel and find an operator to take it. We told him we didn’t have the money to pay him but we would give him 10 per cent of the equity. The guy agreed. He spoke to the Thomson organisation, who offered to come in on a 50/50 basis and we signed a 30-year lease. We banked the contract and it gave us the money to build the hotel.”

That was the first time he had been in the hotel business, but not the last, because he later acquired the Comino Hotel after some incisive negotiating. “I enjoy making good deals. People don’t believe that you can make deals without money.”

It was this kind of acumen, as well as application which involved working 14-hour days, that drew Dom Mintoff towards Mr Mizzi in 1973 when the relatively new Prime Minister decided to set up Air Malta.

Mr Mizzi was in his garden in Gudja – where he has a weekend residence which was once the home of Malta’s first governor, Sir Alexander John Ball – when a policeman knocked on the door one Saturday evening, saying the Prime Minister wanted to speak to him. Mr Mintoff asked if he was interested in helping the government. “I told him that if it’s commercial, I’m willing to talk, but if it’s not to forget it because I’m not a politician and I’m not interested in politics.”

Mr Mintoff said he could only offer Mr Mizzi the equivalent of the highest salary in the civil service at the time, but the businessman said he would do the job for nothing “so when I wanted I could leave and when he felt like it he could sack me”.

Mr Mizzi never had a contract, but was in the post for almost 20 years. The only loss the airline made (€1.47 million) was during his first year at the helm in the midst of a fuel crisis. Unsurprisingly, Mr Mizzi was also asked by the government to set up other entities such as Sea Malta, Middle Sea and Medserv.

The two men did not previously know one another, but they cultivated a long-standing relationship. He describes Mintoff as “a difficult person, but a fantastic negotiator”, though their association was not without volatility.

“He once questioned why I had recommended a certain aircraft to the government and not another. I told him, because according to our consultants it was better suited to Air Malta’s routes. Suddenly he said: ‘Mela xi ħadd qed iġibulek sħun?’ (have you taken a pay off?). I closed my file, got up and said: ‘Do you mind if I leave? I do my job and I do it properly’. I said if there was anything no one could question it was my honesty. That is something I had protected all my life and I didn’t expect to hear that from him. He withdrew it and we continued.

“He was very difficult but had a lot of respect for me because I used to sort out commercial things for him.”

Mr Mizzi is obviously not happy to see Air Malta going through difficulties today, but points to the decision to invest in Azzura Air and the Avro aircraft as the start of the decline.

“They didn’t do their homework properly. Simple as that... and when you start sliding, you slide very quickly. It’s going uphill that’s difficult.” He adds that other factors have compounded those decisions, especially the advent of low-cost airlines, but believes the national airline can compete if it sets up a similar business model.

However, “they have a tough job on their hands” according to the airline’s former chairman, and pain is inevitable. “Today things have changed. You don’t run something with 50 people, when with technology you can run it with 10” – and there must be a complete change in practices and working conditions. “That’s what I mean when I say the airline must go the whole hog. Reducing the staff complement is not enough. There are things that need to be addressed because we are competing with the whole world.”

Yet there is no denying the fact, in Mr Mizzi’s view, that politicians, “all of them”, have contributed in no small way to Air Malta’s problems. “When I was at Air Malta, at Budget time the minister used to go around to see what employment he could factor in for the following year.

“He’d say: ‘Who will Air Malta be employing next year? I’d reply, ‘nobody, because we don’t need anyone’. And the response would be that the airline had to take at least 100 people whether you like it or not.

“Ministers are the worst, not the government, because they employ their own people. They go to the chairman and say I’ve got so and so, find him a job. We’re in Malta, and you know what happens. They take them on. There’s no distinction between one minister or another; or one party or another. I have worked with both parties, and they’re all the same.

“For me, politicians, at least many of them, are the most dishonest people in this world. Being dishonest doesn’t necessarily mean stealing money, it also means that a particular person is due a promotion and deserves to have it, and instead of giving it to him I give it to you.

“Your son comes first in an examination, but for political reasons they employ the number two instead of number one. That is also dishonesty. It has happened and it still happens. These practices will never stop. Malta is the best place to live if you can get away, but the biggest problem we have is that everybody knows everyone.”

So how has he managed to maintain good relations with both parties over many years? “Because I’ve only worked on commercial things. When politics get involved I get out of the meeting. I don’t deal with it and I tell them: ‘get somebody else to do it’. I have political opinions, but I don’t have political opinions connected with business. Business is business.”

Mr Mizzi was dragged into a political controversy in 1983, when his house was bombed in the early hours of a late June morning. He was not injured, but the Labour administration had used the incident as an excuse to break off discussions, on pivotal changes to the electoral system with the Nationalist Party, which had been denied passage into government after gaining the majority of votes in the 1981 general election.

The unsubstantiated accusation was that a PN supporter had planted the bomb, which the party had strenuously denied. “It didn’t scare me, but it did bother me, which is why I had described it as one of those things. If you had to ask me who did it, I wouldn’t know. One party blames the other. The bombing could either have been for political purposes, or for commercial reasons. But I was used. And I told Mr Mintoff that he took the opportunity to use me. There was no reason for it. But politicians are what they are. That’s dishonesty again.”

When asked if there is corruption in Malta, he has difficulty taking the question seriously: “Are you joking?” he says, though adds it is present everywhere in the world. Does he believe it also exists at a political level? “Yes. It existed and will continue to exist. Such is life. Don’t try to stop things you can’t handle. What you have to do is try and control it.”

Mr Mizzi adds he does not for a moment think that any of the prime ministers he worked under were corrupt and is quick to vouch for them. “Mintoff was the stingy type. If you ask him what he wants, he’ll take everything. Karmenu Mifsud Bonnici, Eddie Fenech Adami, who I worked under for a time, Alfred Sant and Lawrence Gonzi are all honest people.

“Corruption was more common during the Mintoff days. That’s a fact. Because, unfortunately, Mintoff only heard from ministers what they knew he wanted to hear. He did not mix with people so he didn’t know what was happening.

“I remember one time when someone mentioned something to him about corruption. He turned to me and said, is it true? I replied: ‘That what’s people are saying’. His response was: ‘What can I do if that person has helped me to build up the party? Can I take action against him?’ You see, this is small Malta.”

Mr Mizzi acknowledges that dishonesty also falls outside the political boundaries, particularly when it comes to people not paying taxes. He believes the black economy will always be present, but insists on the need for more control. “Here everyone knows everyone so people get away with it. For instance, the government needs money, but I have a question: why aren’t the penalties declared in court, traffic fines and so on, being collected? There are millions due. It’s bad management. If we need money, we should be collecting that money.” He is also critical of VAT evasion, which he says he often experiences himself. “The government is trying to address the problem, but again, Malta’s small.”

The issue is all the more pressing, according to Mr Mizzi, because he does not believe there will be any growth in the local economy this year. “It might even decline further as money is becoming almost unavailable.  Banks are being very careful when it comes to even the slightest risk.

“Tourism, being one of the main pillars of the economy, will also decline in 2012, bookings are down and operators are already pressing hoteliers for discounts. Unfortunately, there is very little we can do as we are part of the European economic problem. We need to try and reduce our costs.”

Central to the European economic problem, as he puts it, is the single currency, which has been on life support in some people’s eyes. Mr Mizzi is on record as saying that nothing is impossible, does this include saving the euro? “Germany will save the euro if it wants to. Because sooner or later if Greece doesn’t toe the line they’ll throw them out. That would be the best solution if you ask me. You never get anywhere with the Greeks. They promise one thing and do another. And even if they give them the money, they’re in trouble again after a year. In Greece no one pays taxes.”

Corruption existed and will continue to exist. Such is life

He believes other countries in the eurozone are more disciplined and focused, especially now that Silvio Berlusconi has also departed. “He could have remained there if he wasn’t stupid – because he has a very good brain. Although your private life has nothing to do with politics, people still take it into account. And if you’re devoting time to personal problems, you can’t devote time to politics. He was stupid.”

Muammar Gaddafi, on the other hand, was “hard-headed”, since there was no way he could win with his country and Nato against him. “At certain times with intelligent people, their brain doesn’t function. He should have known that sooner or later he was going to lose.”

Mr Mizzi was first introduced to the former Libyan leader by Mr Mintoff in the 1970s during a visit to the North African country, and is involved in a company that owns a string of outlets there which include fashion stores like Mango, Next, Terranova and Marks and Spencer (his relationship with Marks is a story in itself). This gave him the opportunity to see both faces of the former leader.

The ugly side was apparent when Col Gaddafi’s men told his company to get out as soon as they had finished building the Marks and Spencer store, because he claimed it was still financed by the Israelis. However, with the assistance of the then British Ambassador to Libya, Vincent Fean, who in his previous term was British High Commissioner to Malta, the former Libyan leader relented. To such an extent, that he did a complete about turn and decided to visit the store himself in the middle of the night during Ramadan.

“Col Gaddafi bought what he had to buy for himself and as he was leaving some 300 people were clapping outside. He told them this was the kind of investment Libya needed and instructed them to enter and buy anything they wanted. He would pay. He left his accountant there and our managers told him you’ve also got to pay for what they steal – because you can’t control half of them. He said, yes OK. We made a fantastic deal there, because they emptied most of the shop. We certainly won’t have another sale like that!”

Contrary to some, these Maltese outlets in Libya also did roaring trade during the conflict after Col Gaddafi handed out money to loyalists in an attempt to whip up support. People were afraid that they wouldn’t be able to exchange it anywhere, Mr Mizzi says, so they went shopping.

“We sold thousands of euros’ worth of products during the conflict. Now we’re trying to get them back on their feet. We hope it will settle down, but it will take time. They have no set-up, no administration, no nothing. People talk about projects and things, but in reality these big tenders won’t happen for a number of months because there is nobody to issue them.

“The Libyans are fighters and, as we’ve seen, they did it on their own. I believe they want to set up the country along modern systems and they will do it if the tribes agree. I am very happy the change took place. There are now no restrictions and we can expand further.”

Expansion has been key to all Mr Mizzi’s business activities, both abroad – where he also built a Santa Marija-style estate in the Seychelles – and at home. Today he is most closely associated with the Midi development, encompassing Tigné and the long-time dilapidated Manoel Island. It took him eight years to negotiate the deal with three administrations and he was forced to change shareholders as he went along. But he kept going because he believed in the project and stresses that it was unanimously approved by Parliament.

“I’ve been involved with property for 50 years and I’ve learnt one thing that was taught to me by Toninu Cassar Torregiani, who was chairman of Bank of Valletta’s forerunner, the National Bank of Malta. ‘Stick to three things, he told me, if you want to make money in property: location, location, location.’ And I’ve followed his example.

“Santa Marija Estate, Mellieħa Bay Hotel and Comino are unique locations. Manoel Island and Tigné are unique locations. That’s why I didn’t give up on them.” Tigné Point was recently named ‘Best Mixed Use Development in Europe’ at the European Property Awards ceremony in London, but the project has come under fire locally for blighting the view from Valletta. Does it bother Mr Mizzi that this criticism will be one of his legacies?

Do you know what the biggest problem is in business here? Jealousy. And do you know who are the most jealous of you? Your own friends

“Yes, but both political parties knew what was going to happen. They are the ones who issued a tender for this development. They were interested in developing the area and wanted money for it. The environmental sector didn’t complain when they took that decision.

“To be honest with you, today I have second thoughts about how it looks from Valletta myself. As an individual I am not totally happy with it. But I employed some of the best architects in Malta to work on it and in truth I doubt there could be any architectural style that would fit in without being criticised. These things need time and time will be the ultimate judge.

“We’re changing plans as we go along, due to environmental considerations. We had permission to build a tower block, which we’ve now dropped.

“If we didn’t care about the environment we wouldn’t have removed it because it’s in the deed. We did it because we agree with them and because we were given the volume in different areas. We did the right thing. I agree.

“However, I have to get the money we paid to the government from somewhere. People think we’re making a packet out of it. They don’t realise the millions we’ve invested in the roads and services. The government didn’t put in a cent. And where else in Malta can you go out and not find traffic, where all the roads are underground? Nowhere. Some of the things we’ve done are good, so please don’t criticise us without telling people about the good things we did.

“People should see the restoration we have undertaken at Fort Manoel and they will realise the good things we do. Even there, we’re trying to create more open space than we had in the past. And it will be better because we’ve learnt our lesson.

“However, now that we have almost completed Tigné Point and are about to start Manoel Island, I say to the government and to the NGOs: if you believe that Manoel Island should be ‘saved’ from a development you wanted all those years ago, we are willing to discuss it.

“We have already invested millions in Fort Manoel and elsewhere as part of our infrastructural obligations, but if you, on behalf of the taxpayer, are willing to compensate us for these and for other unrecoverable costs incurred, we are willing to talk. We will not be accused of raping Manoel Island when it was the government that issued this tender in the first place.”

But he also points to what he sees as an unhealthy national pastime: “Do you know what the biggest problem is in business here? Jealousy. And do you know who are the most jealous of you? Your own friends. Mark my words. I’m an old man and I know what I am saying. I can see through people today. It is very unfortunate.”

Mr Mizzi himself has few reasons to envy anyone. He has built an unrivalled business empire – though he says money itself means nothing to him – and received an OBE from the UK and a Gieħ ir-Repubblika along the way, which, unlike the green stuff, are close to his heart.

However, even at this late stage of his working life he still takes immense pleasure when he gets something unexpectedly, like the chairmanship of HSBC Malta when the global bank bought the state owned Mid-Med in 1999. “Up to this day, I don’t know who recommended me. This was not something I had asked for, but something that came my way from a large company. I didn’t think I was known in the commercial and financial sector in London, but it seems I am.”

False modesty? More likely frank reflection and a sense of perspective. The man who wants to be remembered for being nothing more than a “hard worker” still sees himself as an ordinary businessman. And given his relatively frugal lifestyle, he is. But one that has undisputedly managed to do extraordinary things.

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