Updated 8.15pm

The private construction company given 12 tumoli of public land in Gozo without a tender to develop an SME park has already transferred the whole project to another private company owned by two Gozitan developers, the Times of Malta can reveal.

Asked on Monday to state if he was aware that the private project on public land, awarded directly by Malta Industrial Parks (MIP) to Ta’ Maggi Industrial Park Gozo Ltd - had already changed hands, Economy Minister Chris Cardona who is responsible for the MIP, did not reply.

The Times of Malta is informed that soon after a contract was signed between MIP and Ta’ Maggi, so that the latter could build 76 large garages on public land in Xewkija to be used for industrial purposes for at least 65 years, the Maltese construction company entered into another private agreement with two Gozitan developers to administer the project on its behalf.

The developers are Joseph Portelli Projects – one of Malta’s  largest land developers, currently behind the Mercury Towers project in Paceville – and Agius Properties Ltd, whose owner is also a shareholder in Gozitan supermarket chain Ta’ Dirjanu.

READ: New MIP chief gets an €80,000 deal, including perks

Francis Gauci, one of two owners of Ta’ Maggi, confirmed when contacted that “Portelli is currently administering the project, building the garages and selling them on our behalf”.

“The project is out of my way and in order for me not to stay coming and going to Gozo, I’ve subcontracted the administration of this project to Portelli,” he said.

He did not say whether money was involved in the private agreement between Ta’ Maggi and the two Gozitan developers.

Despite that the project is still in embryonic stage, so much so that bulldozers are currently excavating the site, both Gozitan developers have already app-roached a number of businessmen, offering the new warehouses for sale.

One developer is Joseph Portelli Projects, which is behind Mercury Towers project

At the same time, despite that according to MIP, the land was given to Ta’ Maggi following a project proposal by the private firm, Mr Gauci insisted that this was not the case, as it was MIP that approached his company to carry out the project.

According to Mr Gauci, since his company had already completed a similar project in Malta, MIP wanted to use their expertise in a similar project in Gozo. The Malta project was a private business venture by Ta’ Maggi in Xgħajra in 2009 and the government was not involved.

Ta’ Maggi Industrial Park Gozo Ltd, which signed the deal with MIP recently, was formed on May 10, soon after the electoral campaign began.

Apart from Mr Gauci, former owner of the now defunct Save On supermarket, the company is also owned by Kenneth Abela, known to have very close connections to the Labour Party.

One of Mr Abela’s private companies, Aiken Ltd, owns the billboards supplied to the Labour Party for its electoral campaigns in 2013 and 2017. He is also involved in another controversial project, a hotel in the pristine ecological il-Kalanka area in Delimara.

The Sunday Times of Malta has said that a few weeks ago, MIP awarded a large tract of land directly to Ta’ Maggi to be turned into warehouses.

The project is expected to generate some €10 million, while MIP will get €80,000 a year in the lease of public land. Proprietors of the new garages will have to pay some €1,000 a year in ground rent to MIP for 65 years, which can be extended to 99 years.

Asked to explain how MIP was able give public land to private developers, MIP said it had used the same method for the allocation of factories. When pressed for a list of similar allocations, excluding factories, MIP did not reply.

According to Malta Industrial Parks, “the investor (Ta’ Maggi) cannot sell the property – as the land ultimately still belongs to the government – but can only lease on long term”.

MIP is insisting there could be “no speculation” on the ground rent and the project will have “an overarching and strategic economic value”.

Asked to make public the “independent report” MIP said it had commissioned before approving the project, the Economy Ministry did not reply.

In a statement Sunday, the ministry defended the deal, saying it was in line with provisions in the Government Lands Act. It said MIP would have to formally approve all tenants in the industrial park and Mr Gauci would not be able to sell it, as it “ultimately still belongs to the government”.

Tonio Fenech offered us the deal in 2009 - Ta' Maggi

In a statement on Tuesday afternoon, Ta' Maggi Industrial Park Ltd claimed that former Finance Minister Tonio Fenech had offered the company the Xewkija deal back in 2009. 

The offer to develop the Xewkija site and others, Ta' Maggi co-owner Francis Gauci claimed, was made at the inauguration of an industrial park developed by Ta' Maggi in Żabbar. 

READ: Illegalities at Ta' Maggi industrial park in Żabbar sanctioned

"At that point TM [Ta' Maggi] asked for time to consider the proposal, and later that year TM indicated its willingness to enter into such an arrangement in respect of the site in Gozo," Mr Gauci said, adding that the Xewkija park was mentioned in the subsequent Budget speech.  

In his 2010 Budget speech, Mr Fenech had told parliament that the government planned to partner with the private sector to develop "two micro-enterprise parks in Mellieħa and Xewkija Gozo."

Mr Gauci defended Ta' Maggi's decision to hire contractors to develop the park, saying that the company specialised in the management and planning of industrial spaces, and did not build facilities itself. 

Fenech scoffs at Gauci statement

Former minister Tonio Fenech, dismissed his version, however: "I did not approach! I was accompanied round the place by the guy and a discussion on the desirability to see other similar projects is not the granting of land in Gozo."

MIP denies onward transfer

Malta Industrial Parks insisted it received no formal request to transfer shareholding of the tenant company to third parties, noting that such transfers require MIP approval as per the requirements of the emphyteutical deed.

"MIP reiterates that the investors or any third party cannot sell the property at Tal-Barmil, as the industrial land belongs to the Government and was only transferred to Ta’ Maġġi Industrial Park Ltd on an emphyteutical grant.

"As illustrated by the public deed, the investors will plan, build and operate the SME Park. Rent will be charged to tenants whose projects are eligible under the Business Promotion Act, which ultimately need to be formally approved by MIP so as to ensure they fit the purpose of the site. All tenancy arrangements with third parties have to be approved by MIP.

"MIP approved the project proposal in lines with all other industrial properties and its proven economic value to the overall economy and to Gozo’s specifically. The SME park will create nearly 300 new jobs in Gozo and encourage the relocation of a number of operators from the village core to an industrial zone. The park will also regenerate activity in the Xewkija industrial site which had previously hosted a significant element of manufacturing activity in Gozo," it said in a statement.