A small turnkey firm is told their work at finance minister’s house is in return for brokering the Jerma hotel sale.
Tonio Fenech denies all allegations.
Turnkey firm insists it is still owed money for works.
JPM Brothers, owners of the Jerma, were trying to sell it off to the Gasan and Tumas magnates.
Finance Minister Tonio Fenech may have landed himself in the soup once again, over a serious altercation with a small contracting company that carried out renovation works at his new semi-detached villa in Balzan.
MaltaToday is in a position to reveal how the minister used the services of building speculators JPM Brothers (Montebello), owners of the Jerma Palace Hotel, to renovate his house.
But the sub-contractors engaged by Peter Montebello to do the works, have told this newspaper that Montebello told them they were working for the minister, as a favour (“bi pjacir”) in return for his intervention in the sale of the Jerma hotel to entrepreneurs George Fenech and Joe Gasan: with whom the minister travelled aboard George Fenech’s private jet to watch Arsenal play in Spain back in April 2009.
“Peter Montebello said the works were ‘bi pjacir’, a favour for the minister to help him sell off the Jerma to Gasan and Fenech,” Charles Magro – one of the directors of Rainbow Turnkey Projects – told this newspaper. Magro insisted that this was also told to him personally by Tonio Fenech himself.
But the Jerma deal never took place, and with JPM finding itself in serious financial difficulty during the summer, Rainbow Projects had to turn directly to Tonio Fenech for their payment.
The pending matter was brought to the attention of the Prime Minister’s personal secretary Edgar Galea Curmi by the turnkey operators themselves. No action has been taken as yet.
Finance Minister Tonio Fenech is vehemently denying allegations that JPM carried out the works in return for his intervention on a business deal.
In February 2008, the turnkey firm Rainbow Projects was subcontracted by the Montebello brothers – developers of the Addolorata towers, the ex-Mistra village and owners of Jerma Palace hotel – to carry out works at 216, Old Railway Road, Balzan.
They met up with Jeffrey and Peter Montebello and architect Tancred Mifsud – a former PN councillor for Balzan, and member of MEPA’s development control commission.
“Peter Montebello told us the works were ‘bi pjacir’, a favour,” sub-contractor Charles Magro said.
“We were instructed to keep costs to the bare minimum. We asked them who was contracting us, and they said it was the company – JPM Brothers – that was engaging us. So we started issuing our quotes to them.”
Rainbow issued their first quotes: €8,000 for structural works, and €35,000 for services. Peter Montebello confirmed the quotation and told them to start the works as soon as possible, but also asked for a €5,000 discount. “We said we’d consider it, depending on the payment programme.”
It was soon after works had started, that Magro was informed by his workers on site in Balzan that finance minister Tonio Fenech had just visited the house.
“They told me that Fenech owned the place and that he had come to see the works. So I called Peter Montebello, who confirmed it. But he also confirmed yet again that the works were in return for a favour,” Magro said.
So Magro decided to call back his workers, urging them to go about their job without passing any unnecessary political comments, and to be extra careful with the works.
From then on, it would be the minister’s wife who would visit the site every morning at 8a.m., and then the minister would pop in after 1p.m.
“Fenech’s wife was ordering more work to be done. So when I saw the work piling up to the original plan of work, I called Tancred Mifsud because no payment had been forwarded for the extra works. And he told me to contact Montebello,” Magro said.
A week later, the Montebellos paid Rainbow €15,000 – of which €6,000 were in settlement for previous dues.
“I told Montebello the payment was not enough… so I called Tonio Fenech, and he told me to contact the Montebellos because they would deal with it.”
Sure enough, the next day Peter Montebello was contacted by Fenech, because Montebello later called Magro. “He told me to trust him because the deal was about to be closed.”
But a week later, and after many attempts at getting hold of Montebello, Magro was summoned to Montebello’s office for payment. He received €10,000 and was told the rest of the payments would follow.
“He told me that Fenech was helping them sell off the Jerma hotel to Joe Gasan and George Fenech and the deal would soon be concluded,” Magro said.
MaltaToday has meanwhile asked Tonio Fenech to comment on this allegation. The minister categorically denied he had asked JPM Brothers to carry out works in his private residence with the aim of concluding business on the Jerma sale. “It’s a lie. My arrangement with JPM Brothers was against payment, as according to their quote. Rainbow were sub-contractors for JPM Brothers and I cannot comment on the exchange that took place between them.”
Yet again, a week later, Magro called Tonio Fenech asking for payment. The minister again told him the Montebellos would soon pay them.
“The minister told me to speak to Montebello adding that they had almost concluded – ‘ghax wasalna’ is what he told me,” Magro said.
But after repeated attempts to get hold of Montebello, he called the minister once again, who told him he would personally contact Montebello to pass on payment.
Seeing that no payment had been settled, Magro reduced his workforce at Fenech’s home from seven men to two. Two days later, Tonio Fenech called Magro.
“He told me that Montebello could not pay me, but that he (Fenech) would assume the works and continue with the payments. So I told him that I was owed €35,000 and he demanded a precise quote: I issued two quotes, one for works carried out and paid for by JPM – and those liable to Tonio and his wife Claudine.”
Getting back to Magro, Fenech indicated he would issue a €20,000 cheque, but insisted that he hurry up with the works.
“We met up, some time later, at the house with the minister and Tancred Mifsud. Fenech asked me for a discount on the works, but I told him that JPM Brothers had dishonoured their agreement with me on the works.”
On the architect’s insistence, the quote was revisited and the price reduced by €2,700. As the days passed and no further payment was forthcoming, the minister insisted on a €5,000 discount.
“But I refused,” Magro said. “And he said he would apply a daily €1,000 penalty fee for works he claimed were late… even if there was no contract between us. At this point we started to argue, and soon enough he called me to collect another payment.”
Magro says he was anxious about this meeting, so he asked his co-director Stephen Micallef to accompany him to the minister’s office in Valletta.
“We apologised to each other for the flare-up and agreed to be more civil with each other.”
It was here that Tonio Fenech told the two men that the issue of payment should not be bandied around in the media since it would cause him harm.
“He told us to keep it to ourselves, or it would harm him politically,” Magro said.
But Tonio Fenech also denies this allegation: “Although Rainbow’s relation was with JPM Brothers, when Rainbow started slowing down on their work because they were not being paid by JPM, I offered Rainbow to take over the arrangement and pay them directly myself. What I told Magro was that the political harm that could have been caused was had I employed someone for the works and not paid them.”
Fenech issued a cheque of €10,000 and agreed that he still owed Rainbow Projects €25,000.
But despite the good will shown in this meeting, the minister did not forward any further payments.
“At this point he started sending messages through his architect, Tancred Mifsud, who told us the minister was insisting on a discount. I felt that the goalposts had been changed and turned down the request. So Tancred Mifsud ordered us to stop the works, sum up the unfinished job, and collect our tools from the site.”
And on arriving at the site, Magro says, he discovered new workers had been brought to work in the Balzan home.
“They were workers from Gap Developments,” Magro said, referring to the company of George Muscat, the developer of Tigné’s Fort Cambridge.
“Tancred Mifsud said he would finalise the quote for the unfinished work and send us the balance – which turned out to be €3,400 less than the pending €25,000.”
When that payment did not arrive, Magro started sending SMSes to the minister, until Fenech finally answered: "We have sent settlement by post Monday".
But when the letter arrived, it was peppered with accusations against Rainbow Projects’ work. “And all we got was a cheque of just over €900 as final settlement for the works that had been started off by the Montebello brothers.”
Minister Fenech has insisted with MaltaToday that according to his architect’s calculations, he does not owe any more money to Rainbow. “I have sent them a settlement letter with a cheque which they have accepted and cashed.”
Only last month, the directors of Rainbow asked the Prime Minister to intervene in the case. They met the Prime Minister’s personal assistant Edgar Galea Curmi in the presence of an OPM official, who met the directors and promised he would look into it. There have no developments since this meeting.
A spokesperson for the Prime Minister said that the OPM is informed that minister Fenech paid for the works carried out by Rainbow and a receipt was duly issued against payment.
“OPM is also informed that subsequently a dispute arose between Minister Fenech and Rainbow. The matter is presently being handled by the legal advisors.”
Although questions were sent by email to the Montebello brothers as requested by them, no answer was forthcoming at the time of going to print.
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Magro insisted that this was also told to him personally by Tonio Fenech himself.
