Malita plc, the special purpose vehicle being set up by the government to finance the building of City Gate and Parliament, was a long-term investment instrument which would ensure financial sustainability.

Opening the debate in Parliament on a motion for the transfer of properties to the company, Finance Minister Tonio Fenech said the SPV would be listed on the Stock Exchange as a national investment fund. The company would manage national or strategic projects to contribute not only to development but also in sectors where the government would see the need for investment.

Besides, it would also be an investment company with liquidity to invest such revenues in local and international circles in order to maximise those revenues.

Contrary to some perceptions, the minister said, Malita was not being set up to hide national debt. Although it would be starting out on the parliament and theatre projects, the government intended to use Malita for various projects such as the new schools construction programme and the new Mcast campus.

Malita would also signify better planning for national finances. The government would repay the company’s investments in projects with interest, and to do so it would have to plan its repayments and avoid accumulation of the national debt, something to which the government was committed. Budgetary planning would henceforth ensure the inclusion of paybacks.

One way in which the government would reduce national debt would be to repay Malita at 3.7 per cent, or 0.5 per cent less interest than what it was currently paying on government stocks.

The SPV would also be involving private capital by deciding to rent out new projects to ensure payback of the original outlay in a reasonable time.

Mr Fenech said that in talks that had started two years ago, the European Commission had pointed out a number of instances of good practices along this line.

Malita would start off with a capital of €15 million from the government, eventually to be increased by €10 million, and €40 million (or half the cost of the parliament and theatre project) from the European Investment Bank, which in itselfindicated confidence. It would also have 20 per cent of share capital by the general public, which would be the only private shareholding allowed.

The SPV had already been set up last year because setting up a new company did not require House approval. The parliamentary process was needed only to create the financing of the institution by transferring the assets that would contribute to the fund.

There was also the footprint needed for the first project to be financed by Malita. It was well known that the opposition felt this was not the most important project, but the government disagreed.

This would be the first time the people would have their own parliamentary house, rather than one housed in the rulers’ palace. The theatre, on the other hand, would give new life on a cultural level.

Mr Fenech said the resolution included a proviso that if some future government sought to relinquish its holding in Malita, it would have to seek House approval. On specific occasions Malita would be able to sell projects it had financed, but only after an extraordinary general meeting and recourse to Parliament.