MFSA issues €1.1 million direct order for office space

The financial services regulator is refusing to explain why it has to fork out €1.1 million of taxpayer funds for more office space through a direct order instead of trying to get the best competitive price on the market.

Through a direct order approved by Finance Minister Clyde Caruana, who has recently insisted that ministers must cut their spending, the MFSA has reached an understanding with the owners of The Fort Business Centre in Mrieħel to lease part of their building, mainly offices and car garage spaces.

This arrangement, which should have followed public procurement rules rather than a direct order, will see the owners of the building rake in €1,112,400 over three years, or almost €400,000 a year.

It is as yet unclear whether the MFSA is paying above market rates as it is refusing to give details of the lease’s contract and the actual space rented. The MFSA has not replied to questions from The Shift.

Property industry sources told The Shift that the lease price seems “on the high side”, even though more details are needed to assess actual value for money.

“Currently, there is an oversupply of office space in the country, and prices are very competitive. Just down the road from the MFSA, in Mrieħel, there are a number of empty offices available that could be leased at less cost to taxpayers. But it seems that not all businessmen in Malta are the same as some prefer getting direct orders through their contacts in high places,” a senior property consultant told The Shift.

The beneficiary of the latest government direct order is Tal-Lira Investments Ltd, which owns The Fort office block in Mrieħel, apart from other businesses.

The company directors, Malcolm Sant and Etienne Vella, are directly involved in the management of the JB Stores of Iklin, which expanded its businesses into various other sectors, from hotels to property development.

During the past years, members of the same group had sought a controversial PA permit to convert an abandoned explosives factory in Dingli into a luxury tourist complex. However, following protests against this abuse of idyllic ODZ land, the application was withdrawn.

This is not the first time the MFSA has expanded its office space into neighbouring offices.

MFSA sources told The Shift that while it has been clear for several years that the current MFSA headquarters in Mrieħel is no longer fit for purpose, the government is insisting on leasing nearby office space at exorbitant costs through a piecemeal approach.

“It would make much more sense if the MFSA sold its building and relocated lock, stock and barrel to another location,” a senior official said.

The MFSA has been hit by a series of scandals over the past years, mainly when managed by Joseph Cuschieri, a close associate of disgraced former prime minister Joseph Muscat and son-in-law of President George Vella.

Cuschieri was issuing direct orders worth millions with little to no control from the finance ministry.

Cuschieri was forced out after having been exposed travelling to Las Vegas with Yorgen Fenech, accused of commissioning the assassination of journalist Daphne Caruana Galizia, in the company of the MFSA’s general counsel Edwina Licari.