EXCLUSIVE: Government forced to concede to Dubai in Smart City concessions over AUM deal

Tista’ taqra dan l-artiklu bil-Malti hawn.

The Dubai government, the majority shareholder in the supposed development of an ICT Smart City in Kalkara, has succeeded in forcing the Maltese government led by Prime Minister Robert Abela to give in to all the demands of the Dubai Sheiks – their consolation prize for the return for two parcels of public land.

The Shift has exclusively confirmed that before the Dubai shareholders would agree to return two parcels of public land at Smart City – one to be passed onto the Jordanian investors of the American University of Malta (AUM) and the other for a still on-plan ITS campus – the government was forced to accept the drastic revision of the 2008 parliamentary approved masterplan, which upended all the parameters of the Smart City project into one based on real estate speculation of public land.

Property industry sources told The Shift that while the government is trying to sell the land swap idea as some sort of political win for the public, the reality is the complete opposite.

“Taxpayers and the public at large are the biggest losers through this deal as now the Smart City owners, who have not delivered on their project, are going to be given a new lease of life and permitted to change the project into another real estate development of public land”.

“As if this were not enough, they will be trading land acquired at ridiculous rates and selling it at market prices. Apart from continuing to distort the local property market, all the profit will not go into public coffers but directly to the government of Dubai. This deal is one of the most obscene sell-outs by a Maltese government,” the sources said.

To date, the government has not made public the deal agreed with Smart City and the AUM. Two parliamentary resolutions to approve the deal are expected to start being debated by a parliamentary committee on Tuesday. However, the resolutions have not been published yet and have been given only to Opposition MPs.

No comments about the contents of the deal have yet been made by the PN Opposition.

The Shift is informed that the government has agreed to a total revamp of the Smart City Master Plan, accompanied by a new business plan, which will see the entire area developed into an upscale real estate project, rather than the originally planned ICT city.

The government was forced to accept that more parcels of public land at Smart City should be dedicated to residential and villa areas, to sell to speculators, while the emphasis on the ICT aspect is significantly reduced.

The revision will also include other concessions, such as the cancellation of millions of euros in due fines for failure to adhere to the 2007 contractual obligations, increased height limitations and new time frames for the completion of the project, because the previous ones have been completely ignored by the Dubai investors.

The government’s dealings with Smart City on all these concessions was driven by Robert Abela and Kurt Farrugia, the former aide of disgraced former Prime Minister Joseph Muscat, appointed by Abela  to serve as a director on the board of Smart City Malta.

According to the 2007 deal signed by the then PN administration, the Smart City Dubai investors were given 330,000 square meters of public land for 99 years at ludicrously-low ground rent terms in order to turn the area into an ICT-related city together with retail and residential units aimed at servicing the anticipated “thousands of employees” that would be working there. The largest component of the project was ICT related and the investors were obliged to cerate 5,600 jobs by 2015.

None of this was ever achieved and instead, the Dubai investors stopped committing to their investment, missed all targets and started selling parcels of land for real estate projects, including the ongoing luxury Shoreline project.

While according to the 2007 contract, the government has the right to take back all the land and cancel the deal, as Smart City is clearly in breach of contract, Robert Abela has, instead, now secretly renegotiated the terms of the deal, giving in to all the demands made by Dubai.

According to the latest accounts published by Smart City Malta, the group made €2.6 million in losses in 2020 and as a result paid no taxes. These losses come despite the selling of two parcels of land for some €26 million.

Sources said that publication of the parliamentary resolutions is expected to reveal many more concessions given to both the Dubai and the Jordanian investors, while, as always, taxpayers foot the bill.