Right of reply: MIDI reacts to Cassola claims

The following is a right of reply communicated by MIDI plc.

Reference is made to the article by Arnold Cassola entitled Manoel Island: Who Is Misrepresenting The Facts? published on 29 June in the print edition of MaltaToday and online on 1 July 2025.

While we respect Prof. Cassola’s interest in relation to this matter, various statements he makes in the article are either factually incorrect or omit essential details and accordingly the Company would like to take this opportunity to rectify such statements.

The use of proceeds section in the 2016 Prospectus of the bond issue makes it clear that the bond proceeds were to be allocated to refinance existing obligations at the time and to fund various infrastructural and restoration works at Tigné Point which were deemed essential for closing off the Tigné Point project.

The Outline Development Permit PA PA2135/94 approved in 1999 sets the main parameters for the development of Manoel Island, covering approximately 135,000sq.m of development—residential units, commercial premises, a yacht marina, and sports facilities. This permit was still valid in 2016 when the Prospectus was published, meaning the project had a clear regulatory framework at that time, contrary to Prof. Cassola’s assertion that there were “no permits.”

The article disregards the Company’s position that it is entitled to automatic extensions to the substantial completion date for Manoel Island. In line with the Deed of Emphyteusis, whenever delays arise from permit matters or archaeological discoveries the deed entitles the Company to an automatic extension to the substantial completion date. The Company contends that the various delays entitle it to an extension of at least 10 years for substantial completion.

In this regard the following chronology is of relevance:

Between 2009 and 2012 the company held extensive talks with government with respect to the development of Manoel Island as at the time, the government had directed MIDI to evaluate the possibility of reducing the development on Manoel Island in order to create additional public open spaces. These talks which went on for years yielded no result as government was not prepared to compensate MIDI for any foregone volumes. As a result, the Company maintains that it effectively lost five years—which, under the Deed of Emphyteusis, automatically postpones the substantial completion. These delays are not of MIDI’s making.

The planning process for Manoel Island could only commence in mid-2013 when clear direction was provided by Government to proceed with the development in accordance with the provisions of the original outline development permit. As detailed in the prospectus the company engaged an international consultancy firm to develop a concept brief and a conduct a highest and best use analysis for the property. This brief was used as the basis to select a master planner to design an updated masterplan for the development of Manoel Island.

Foster+Partners were appointed as master planners in the second half of 2016 and a revised masterplan was submitted to the Planning Authority in 2017 and approved in March 2019. The Environment Impact Assessment (EIA) associated with this masterplan was appealed by the FAA and in June 2020 the EPRT declared that the company was required to undertake a fresh EIA. Contrary to Prof. Cassola’s assertion the annulment of the EIA was communicated to shareholders and bondholders via a company announcement dated 18 June 2020.

In 2017, when the revised masterplan was submitted to the Planning Authority, MIDI approached the Superintendence of Cultural Heritage (SCH) to initiate archaeological investigations of the part of the site earmarked for new development. This was solely a precautionary measure as the development brief was clear that the areas identified for development had no surviving relics of archaeological importance, apart from the visible heritage buildings. After archaeological investigations spanning circa five years (2017 to 2022), the SCH concluded that selected areas of Manoel Island, measuring circa 22,000sq.m, could not be developed in view of the archaeological importance associated with the discoveries.

The SCH’s letter of 9 May 2022 directed MIDI to revise its plans for the development of Manoel Island to ensure that no development and construction takes place on the impacted area. It is clear that in terms of the provisions of the Deed of Emphyteusis the time lost associated with the archaeological discoveries entitle the company to a further five year extension to the substantial completion date. In fact, the Deed stipulates that the time lost shall be added to any time period which has been imposed on the Emphyteuta for the performance of its obligations.

The revised EIA which was required in view of the EPRT ruling of June 2020, was approved by ERA in June 2021. This EIA was also appealed by the FAA and this appeal was rejected by the EPRT in January 2023 and subsequently by the Court of Appeal in May 2023. An appeal process which spanned a period of two years.

At the beginning of 2023, the full development application for the development of all new buildings on Manoel Island was submitted to the Planning Authority. In March 2024, at the public hearing for this full development permit, the SCH advised MIDI that it would be wise to commission a Heritage Impact Assessment (HIA) to ensure that the development does not negatively impact the world heritage status of Valletta. This, despite the fact that SCH had issued a no objection after consulting the National World Heritage Technical Committee (HWHTC).

The public hearing was therefore suspended and the Company commissioned a HIA based on terms of reference provided by the SCH which was submitted to the Authorities in September 2024. In January 2025 clarifications were requested and the information requested was submitted in April 2025. The conclusion of this process is still pending.

Finally, the statements made by Prof. Cassola with regards to the 2024 financial statements are also incorrect and misleading. As detailed above, the Company is entitled to an automatic extension to the March 2023 substantial completion date of at least 10 years. In this regard the Board was confident that the project would be completed successfully within the terms of the Deed once the full development permit was approved after conclusion of the HIA.  At the time of the approval of the financial statements the Board certainly had no indication that the government would contest this right nor that it would take the position it has now taken in relation to the project.