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Karl Stagno-Navarra
Crowne Plaza Hotel employees have received their December salaries this week, despite an impasse between government and the prospective developer for the former Holiday Inn and Fort Cambridge over conditions relating to the re-development of the area.
The salaries were paid last Thursday following high-level talks in a bid to salvage the contract, that technically has fallen through since developer and entrepreneur George Muscat failed to sign the agreed Lm23.3 million offer for the property.
The contract was expected to be signed last November 30, however George Muscat informed government that he was registering “an issue” over what he defined as “unwarranted new conditions” to the offer he was putting forward.
While George Muscat insisted that he did not want to reveal his contestations, sources close to government explained that the issue boils down to the type of development he is proposing for the site.
Deputy Prime Minister Tonio Borg – who is also responsible for the Lands Department – yesterday denied meeting George Muscat over the matter and explained that given George Muscat’s failure to sign the contract, he loses the approximately Lm100,000 bid-bond he secured.
Moreover, while George Muscat insisted with sister newspaper Business Today that other meetings were expected to continue at senior government level, in an attempt to conclude on the matter that has been stalled for the last weeks, Minister Tonio Borg stressed that “government will stick to the original conditions as laid out in the brief”.
Adamant on government’s position, Minister Tonio Borg insisted “whether Mr Muscat is still interested or not in the offer is up to him”.
Tonio Borg explained that since George Muscat failed to sign the contract as scheduled last November 30, it automatically prompted the Contracts Department to start corresponding with the other short-listed bidders. “There is nothing else we (government) can do about it,” he said bluntly. “It would be more than ideal for government to conclude with George Muscat, as he accepted the important condition of absorbing all the employees at Holiday Inn and keeping them till retirement age.”
Other bidders declined to comment on whether they have been invited to come forward with their bids to the offer.
Contacted throughout the week, George Muscat – who is one of the Bay Street Holdings shareholders – explained he is “more than confident an amicable solution will be found and the contract will be signed”.
According to Muscat, although his offer was accepted, the issue he has with government has nothing to do with the employees at the Crowne Plaza Hotel, that in so far belongs to Air Malta, to the extent that he has paid their salaries amounting to Lm50,000 every month till last November.
While stating that the salaries were always taken into consideration as he prepared his calculations in his offer, George Muscat explained that following his refusal to sign the contract last November 30, he had stopped paying the salaries. “The investment was never a problem,” he said, explaining that he has raised all the capital through international sources over these last months.
However he made it clear that the estimated total of Lm30 million that would cover the purchase contract would “only” be paid when he is satisfied with the all tender conditions.
Muscat is still seeking planning permission for the demolition of the Crowne Plaza Hotel, and the construction of six apartment blocks containing 386 flats and a four-level underground car park. Muscat will also have to restore the Cambridge Battery and provide alternative employment for the former employees of the Holiday Inn.
ksnavarra@mediatoday.com.mt
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