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Denies MLP is aided financially by Gozitan developers
Julian Manduca
The Malta Labour Party, heavily critical of the Nationalist Party for its granting of Fort Chambray for tourism purposes to Roberto Memmo in the early nineties, has surprisingly remained silent about the recent sale of the complex to Gozitan lawyer Michael Caruana and his family.
The deal, much trumpeted by the current administration, had cold water poured onto it by columnist and former Labour Minister Joe Grima who pointed about that the agreement reached “in secret” would be very beneficial to the Caruanas, who will make a killing should parliament give its approval as is being proposed.
The most controversial aspect of the agreement between the Gozitan family and the Gozitan minister - Austin Gatt - who negotiated it is the fact that Gatt has agreed the Caruana’s need not build a hotel - a condition which was fundamental in the deal with Memmo.
Given the waiver of that condition, the agreement with the government on the proposed development takes on a more speculative nature, rather than the tourism oriented one that was worked out in the 90s. While tourism developments are thought to benefit a region or a country as a whole, the proposed agreement with the Caruanas will mostly benefit the Gozitan family’s bank account.
The government and perhaps more so, the Maltese developers who faced massive bank overdrafts on a project that had come to a standstill, can be satisfied to have gotten rid of Memmo, who has proved to be a shady and impossible character, but the deal with the Gozitans does not look rosy for Malta.
Grima believes the Caruanas are to pay Lm7 million to pay off the current Maltese developers, the Malta government, and Memmo’s company, according to Grima, the Caruanas will avoid building the hotel and sell nearly 500 apartments on what is a prime site on Gozo for about Lm112 million. The Lm7 million may be well short of the target if the Maltese developers are to be believed, and that figure could be more realistic at Lm11 million.
Grima suggests that the Caruana will be set back a total of Lm20 million to purchase and complete the development, but will then sell each apartment at between Lm200,000 and Lm300,000 “in three to four years time.”
“That would make conservative revenue of Lm112 million and a total estimated net profit of Lm92 million,” according to Grima.
Now Grima’s calculations may be on the optimistic side from the developers point of view, although he denies that, but if the Caruanas can build their apartments piecemeal, as the MIDI developers were allowed to do in Malta, completing a few, selling them and using the revenue generated to build the next lot, the money making possibilities become enormous.
Why was the Caruana family chosen? The question may well be asked, and several Gozitan developers have mumbled similar thoughts. Well, the only explanation given so far, and not one that has convinced all, was that the Caruana family were approached by the current developers including one Paul Abela who, it would seem, has had the major interest in the development.
Joe Grima intimated the Malta Labour Party might have a reason for remaining silent about the issue and wrote 18 July: “Why Dr Sant’s deafening silence in this case? Are the Caruana’s friends of his as well as of Austin Gatt as hundreds of business people are these days.” More damningly: “Could this be the MLPN at work? There is hard evidence that people close to Sant in a rather big way, are also close to Joe Saliba.”
Grima, a controversial former Labour minister who was often implicated in dubious issues, has since taken a pro-Nationalist stance and in his columns often takes jibes at Labour and especially its leader Alfred Sant.
The same Sant has remained decidedly tight lipped about the issue choosing to reply to MaltaToday with one word answers. Even when MaltaToday asked him whether the Labour Party felt vindicated about its long criticism of the Memmo deal, Sant could only get himself to say ‘yes.’
Asked whether the Malta Labour Party felt the proposed deal was a good one, and if not how it could be improved, Sant managed five words: “We await the full details.”
Asked to comment on Grima’s allegations Sant repeated himself, “We await the full details.” Given that Grima had implied that Dr Caruana may be friendly with the Malta Labour Party, MaltaToday asked Sant whether Caruana, his company or his family was a contributor to the Labour coffers. The reply was a curt ‘No.’
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