AUM to be sold public land despite breach of licence conditions

The owners of the failed American University of Malta (AUM) project will acquire public land worth at least €63 million for just €15,000, despite being in breach of the five-year licence given to operate the university.

At a meeting of the parliamentary National Audit Office Accounts committee on 30 June, Economy Minister Silvio Schembri attempted to justify the government’s land swap negotiations with AUM by insisting the university is not in breach of its contractual obligations.

The Shift’s analysis of the contract does not support the minister’s claim.

Sadeen Group, the Jordanian construction company that owns AUM, is far from being able to meet the conditions imposed in the original 2015 contract with the Maltese government, which requires AUM to complete its €104 million investment by April 2024.

AUM is nowhere near this target, and has only managed to enrol less than 200 of the 10,000 students it promised to attract.

Despite being in a position to dissolve the controversial agreement and take back the public land, the government went ahead with the deal, with parliament ratifying amendments to the original deed that give the Jordanian contractors new rights to buy some 31,000 square metres of public land at Smart City at a price well below market value.

An analysis of the five-year operating licence issued by the National Commission for Further and Higher and Education (NCHFE) in 2016 clearly reveals that AUM has not met its contractual obligations.

In a speech accompanying the issue of the licence in the summer of 2016, then Chairman Martin Scicluna confirmed that AUM had to reach a minimum required number of students per year.

Apart from starting with at least 100 students on its books by September 2017, another condition which was not met, AUM had to increase its student intake to 350 by 2018, 710 by 2019 and 1,220 by September 2020, with 4,600 students enrolled by its tenth year of operations.

AUM has failed to even approach these targets by its fifth academic year, with less than 200 students on the books, most of them non-paying, enrolled through generous scholarships from the same Jordanian businessmen.

Similar licence conditions applied to the academic staff, which had to reach 330 after ten years. Halfway through the agreement, AUM has less than 30 members on its academic staff.

Despite failing an external quality assurance audit conducted by foreign experts last year, AUM was granted a one-year extension of its licence by the NCHFE, which is expected to be further reviewed this year.

Education industry sources told The Shift that AUM has clearly failed, but the government is still trying to make it work and is now giving the Jordanian property developers unprecedented advantages to try to save the project.

“Since this is a commercial venture, it is very unclear why the government is insisting on giving the inexperienced Jordanian investors more incentives to continue with their business. This is only being done for political reasons and to save face on the promised ‘game changer’ for the south of Malta,” the sources said.

“This is being done at the expense of the exchequer, as the Jordanians are being given state aid through unrealistic real estate prices to shore up their investment,” the sources added.

Last week The Shift revealed how Prime Minister Robert Abela entered into secret negotiations with both Sadeen and the Dubai government to swap a large parcel of public land in Marsascala’s Zonqor region with another in Kalkara that used to form part of Smart City, another failed project.

Instead of dissolving both contracts and taking back public land, Abela has given AUM the opportunity to turn its 99 year temporary emphyteuses into a perpetual one for the ridiculous price of €0.47 cents per square metre.

The prime minister also acquiesced to demands by the Dubai government – owners of Smart City – to change the master plan of the 2007 project so it can turn the once-promised ICT city into a real estate venture.

All of this is being justified under the guise of economic needs in order to save both failed projects.

Because the Opposition objecting to approving the revised agreements in committee, the government had to submit the draft deeds for approval at the plenary, where it passed with a simple majority.