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Matthew Vella
The Malta Tourism Authority will be paying over Lm20,000 in outstanding rent for its office in France, despite having closed down its operations there.
Part of its strategy to rein in operations and costs, the MTA will keep on paying rent for its France office until August 2007, unless its finds another tenant to take up the office.
The national tourism authority has already spent Lm17,615 in legal costs to close down eight offices in its overseas network. The MTA has closed down offices in Belgium, China, France, Italy, Russia, the Netherlands, Switzerland and Sweden, and will still be expected to pay Lm69,000 in rents after the termination of the leases.
It has already paid Lm26,144 for its Dutch office after notice of termination was delivered to the landlords. The MTA is negotiating with the landlords of the offices in Italy and France, with a view to mitigating “to some degree” the rental charges due, a ministry spokesperson said. The Sweden office will be taken over by Air Malta in the immediate future.
This is not the first time the MTA has had to pay its way out of its overseas network the expensive way.
Last May, the MTA paid a GBP55,000 out-of-court settlement to its overseas director in London, John Montague, after Montague sued MTA over “constructive dismissal”. Montague had resigned in January 2005, and allegedly had his wife’s cellular phone bill on the MTA’s expense list. He was employed on a Lm10,000 salary.
The MTA’s 21 overseas and representative offices came under attack in a report drawn up by Deloitte and Touche for the restructuring of the authority.
With a collective spend of Lm6 million, or 64 per cent of the MTA’s total budget, the report said that MTA was channelling excess funds to countries where market potential was “too limited” and that the offices were spending too much on administration and accounting functions instead of marketing and research.
Described as too autonomous and not cost-effective, the report said that directors at the overseas offices had “excessive discretionary limits”, with too little monitoring and control.
The MTA has been in the throes of major restructuring after Deloitte and Touche first lifted the lid on the bloated bureaucracy of “the ship with no captain” back in October 2004. Since 1999, Malta’s tourism declined by 4 per cent in tourist income, and 87,000 less arrivals.
In 2004, the MTA had its budget slashed by Lm500,000 after Prime Minister and Finance Minister Lawrence Gonzi promised the authority its money back if it increased tourism by 50,000 arrivals..
In 2005, the administration gave back the MTA its Lm500,000 for “branding” the island’s product, although there had been no improvement in tourism figures.
mvella@mediatoday.com.mt
Links: www.maltatoday.com.mt/2004/10/24/t16.html
www.maltatoday.com.mt/2005/05/15/t6.html
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