Mega structures built around Shoreline project at Smart City raise concerns

A collection of large structures, including roofed metal sheds, mobile homes and containers have appeared at the Smart City site in Kalkara, coinciding with the arrival of some 400 Turkish construction workers engaged to build the multi-million euro Shoreline development project.

The structures, erected a few weeks ago, dominate the skyline. Concerns have been raised that they may be illegally being used to house the foreign workers.

Checks by The Shift show that the Planning Authority has not given any authorisation for any form of ‘sleeping quarters’ to be erected next to the development area.

Asked to explain, a spokesman for the PA confirmed that the structures are “only temporary” and are not to be used as living quarters for workers.

“These are temporary structures ancillary to, and for the duration of, the works covered by the approved planning permission PA/01029/18. The structures comprise a warehouse, site offices and workers quarters (cafeteria, changing rooms and WCs) which are all approved in the Construction Management Plan.”

According to the submitted plan, some 400 builders will be present on the construction site, with work to be carried out for six days a week between 7am and 8pm.  The plan does include the erection of temporary structures, which also include facilities such as a canteen and showers for workers.

No bedrooms are envisaged in the plans presented to the PA although the ‘temporary structure’ is so massive that it can easily host workers during the night or their off days.

Industry sources told The Shift that while, on paper, the Shoreline developers are stating that the workers will not be living on site, “it remains to be seen what will happen”.

A spokesman for Smart City told The Shift that the development is not related to their company as this is a third-party development following the sale of Smart City property to the Shoreline developers.

Shoreline did not reply to questions.

Cheap labour for multi-million euro projects

Investigations by The Shift show the project, which also includes the construction of a massive shopping mall, together with some 400 ‘luxury’ apartments, will be carried out by a Turkish construction company called Koray Insaat, based in Istanbul.

The company, which calls itself “one of Turkey’s leading construction companies,” will not be using Maltese workers, but will instead be bringing in some 400 builders to work on the project.

The cost of hiring Turkish builders is lower than employing local tradesmen, giving an advantage to both the contractors and the developers over other Maltese construction projects.

As Turkey isn’t a member of the EU, the government would have had to facilitate the importation of these workers.

This is not the first project to utilise foreign construction companies for mega projects.

A few years ago, the owners of the Fortina Hotel engaged another Turkish company – TACA Construction– to build their new hotel and offices in Sliema. The same company was used by the DB Group to build the controversial St Vincent De Paul extension.

TACA Construction had run into serious problems during the projects and is now facing a raft of civil cases initiated by Maltese companies who claim they’re owed hundreds of thousands of euros.

The Shoreline and Smart City scandals

The Shoreline development – another speculative real estate project – came about after Smart City began selling the public property that had originally been designated for an IT village.

In 2008, the owners of Smart City, companies owned by the Dubai government were given around 350,000 square meters of public land in Xgħajra and Kalkara to develop into an IT hub.

However, the project failed to take off, and though the Maltese government had the right to claim back the public land, the Labour government instead allowed the Dubai owners to sell and transfer part of the public land to the Shoreline owners to create another ‘luxury flats’ and shopping mall development.

At the time of this decision, the government, which holds a 10% shareholding in Smart City, was represented by Keith Schembri, then chief of staff to disgraced former Prime Minister Joseph Muscat.

Promoted through businessman Steve Carter, who was later accused of money laundering and ousted from the development, the project is now owned by a group of businessmen led by South African millionaire Ryan Edward Otto.

His partners are Roderick Psaila, former CEO of Agribank, and his wife and DF Advocates partners, Jean Farrugia and Kevin Deguara.

Deguara is known in business circles to be very close to Keith Schembri and he received a number direct orders during Schembri’s years in Castille. He’s been involved in several controversial government projects, and his house and office were recently searched by police investigating alleged wrongdoing in the privatisation of three public hospitals.

Deguara is also involved in a string of other businesses and sits on the boards of various companies including D Shopping and Dizz Finance– the financial arm of Diane and Karl Izzo’s Dizz Group – and of Sadeen Education Investments Ltd – the company behind the beleaguered American University of Malta.