Rebranded Projects Malta to pay €1 million to lease offices from AX Group

Updated to include reaction from AX Group

Taxpayers are set to fork out at least €952,980 to pay for a ten-year lease agreement signed between Malta Strategic Partnership Projects Ltd (formerly Projects Malta) and a subsidiary of AX Group.

AX Group’s subsidiary company, Skyline Developments Ltd, was one of seven bidders who had submitted their offers for the lease. The cheapest bid was submitted by Trident Developments Ltd at €695,000, with the most expensive one, submitted by OzoMalta Ltd, amounting to just above €1 million.

On 7 October 2021, just seven months after AX Group inaugurated its Business Centre in Mosta’s Triq id-Difiża Ċivili, the General Contracts Committee, the government arm responsible for assessing bids for tenders, recommended Skyline Developments Ltd as the preferred bidder.

At the time, the government pulled out all the stops to promote AX Group’s €6 million project. The inauguration ceremony was attended by Prime Minister Robert Abela, Energy Minister Miriam Dalli and Economy Minister Silvio Schembri.

The tender documents stipulate that the ten-year lease includes a clause that obliges Malta Strategic Partnership Projects Ltd, the rebranded version of Projects Malta, to pay rent for the first five years even if the entity seeks to terminate the contract prematurely.

Skyline Developments Ltd lists AX Finance Ltd and AX Real Estate p.l.c. as its two shareholding companies, both of which are in turn ultimately owned by AX Group and its founder, Angelo Xuereb.

AX Group lists a total of 32 subsidiary companies that fall under its umbrella, with various business interests ranging from hospitality to construction to real estate and even elderly care.

The lease agreement signed between Skyline Developments Ltd and Malta Strategic Partnership Projects Ltd is merely a drop in the ocean in terms of how much money the group has made from government contracts and tenders alone.

An analysis of the contracts netted by just one of the 32 subsidiary companies, AX Construction Ltd, showed that from 2018 – 2021, the company was paid a total of at least €6.1 million for various restoration, embellishment and construction works.

Projects Malta was rebranded to Malta Strategic Partnership Projects Ltd following the entity’s involvement in major scandals that occurred when disgraced former Energy Minister Konrad Mizzi was at the helm.

In particular, Projects Malta was at the centre of the ITS-dB land transfer controversy. A National Audit Office (NAO) report highlighted how Projects Malta had not obtained authorisation from the Contracts Department when allowing the transfer to occur.

The land had been given to Silvio Debono’s DB Group to build a massive complex including a hotel, a retail area and a residential area, among other facilities. The NAO had reported that the origin of the decision to dispose of the site was unclear. This was of “grave concern” to the audit office, given the nature of the site.

Projects Malta was also knee-deep in the hospitals’ concession deal originally signed with Vitals Global Healthcare (VGH), which to this day has cost taxpayers hundreds of millions of euros with little to no tangible benefit for the wider public after the promised investment failed to materialise.

The agreement between the government and VGH was at the centre of yet another damning NAO report which concluded that the deal was predetermined. It has also deemed the process as “staged and deceitful”.