An agreement between the government and a private consortium that was to take over the running of the Marsa horse racing track has had to be put off by a further 15 months, as the selected bidder is demanding more favourable terms, the Times of Malta is informed.
A spokeswoman for the Education Ministry, responsible for sports facilities, confirmed an agreement had not been reached in the stipulated time frame of the memorandum of understanding (MOU), and said it had been extended by a further 15 months.
Meanwhile, the spokeswoman described negotiations as “at a very advanced stage”.
The Times of Malta is informed that the bidding consortium, formed by a number of individuals led by Hugh Morshead – a director at the Maltese passport-selling company Henley & Partners – is requesting terms outside the MOU’s remit in order to sign the deal.
Read: Marsa race track MOU published following PN request
Sources close to the negotiations said that although various aspects of the MOU have already been agreed upon, particularly the investment that needs to be done to build a new racetrack, the consortium was insisting on further concessions to use as real estate, particularly to build a large block of offices.
“The investment necessary for the racetrack does not make sense if not complemented by commercial facilities such as shopping malls and office space to rent out to third parties,” the sources said.
“At the same time, the government does not want to give the impression that it is ready to turn another public space into a real estate speculative project.
The ITS saga is still fresh in people’s minds
“The ITS saga, where public land was given almost for free to private developers, is still fresh in people’s minds and the government is trying to avoid another controversial concession.”
To transfer the Marsa racetrack facilities to a private consortium, the government requires to have a motion approved in Parliament.
Read: Talks on Marsa race track privatisation shrouded in mystery
Efforts for the privatisation of the Marsa racetrack facilities started in 2015, when the government’s privatisation unit issued a call for expressions of interest.
Initially, several companies showed interest but only one bid was submitted. Some found the terms of the proposal unrealisable from a commercial point of view.
A few weeks before the last election, an MOU was officially signed between the government and Marsa Race Track Ltd stating that a final agreement had to be struck by September 2017. Now this has been postponed to the end of 2018.
In a ceremony at Castille, Prime Minister Joseph Muscat hailed the €18 million investment, calling it “the largest-ever investment in the Marsa area” and comparing it to the investment in the American University of Malta, with its “boost to the south”.
Meanwhile, in reply to a parliamentary question from Opposition MP Ryan Callus, Education Minister Evarist Bartolo said that the privatisation unit was now being advised by two consultants during the racetrack negotiations.
Abela Advocates, led by Labour MP Robert Abela, is giving legal advice at €37.50 an hour, and was selected following a call for tenders.
For technical advice, the government selected, through a direct order, Architect William Lewis – the organisational secretary of the Labour Party – who is earning €35 an hour.
The Education Minister has also selected Mr Lewis to give technical advice on a proposed motor racetrack.
He has so far been paid €9,000 for this job through a direct order.