MPs waive €1.2 million guarantee for Malta Fairs and Convention Centre deed

The deed for the 65-year lease for the Malta Fairs and Convention Centre at Ta' Qali has omitted any reference to the €1.2 million "performance bond" that was originally envisioned in the original tender of 2006 for the lucrative venue, from which the preferred bidders were chosen.

The transfer of land to MFCC - a company owned by Sign It and catering giants Catermax, a joint venture of the Corinthia and Vassallo groups, was unanimously approved by both sides of the House of Representatives 'nem con' with no questions raised about the deed, during a sitting on 27 November, 2012.

Originally the request for proposals issued by the roads and urban development ministry in 2007 referred to a performance guarantee of €1.5 million (Lm500,000) as a pledge for the developer to undertake to fulfil "all responsibilities and commitments as prescribed in the emphytheutecal deed to bring the project to a full state of operational completion within the prescribed period."

But when asked why the condition had now been dropped, a spokesperson for fair competition minister Jason Azzopardi said there had been "a number of rounds of negotiations [during which] the performance guarantee was removed."

The ministry has insisted that a number of safeguards were implemented in the deed, such as government's right to rescind the contract should works on the project not commence within two years from when the company obtains vacant possession of the site; and when the MEPA permit is issued (whichever is the latest); or if it is not complete within five years from when the MEPA permit is issued.

The deed can also be rescinded if the company is in delay of more than one year of completing the project to government's satisfaction, or if the company fails to submit the full development application to MEPA within 12 months from the date of signing of the deed.

The company has committed itself to relocate the Motor Sports Association site in Ta' Qali at a cost of €250,000.

But it will be paying less ground rent than envisioned in its bid for the tender, something justified by the government because of a change in the location of the project which resulted in the proponents being allotted a smaller land area.

Although the present MFCC site is in fact smaller than the original proposal, planning regulations have been changed since then to allow a height of 15 metres instead of the original 10 metres.

In their proposal, the developers proposed that the emphyteutical fee between the fourth and 18th year is tagged at €232,900.

Now they will only be paying €186,320 during the same timeframe.

In 2006, the company had proposed paying €291,125 between the 19th and 33rd year. But according to the deed they will now be paying €232,900. The deed approved by parliament sets the ground rent from the 36th to 48th year at €363,324 and from the 49th and 63rd year at €454,155 and at €570,605 in the last two years.

But now the company will be paying €290,659, €363,324 and finally €456,484 for the respective timeframes.

The government justified this reduction in ground rent because the site in consideration was different than that in the initial 2006 proposal. Originally, the site was earmarked to be on the opposite side of Ta' Qali but MEPA regulations would not allow for a trade fair centre that obstructed the views from Mdina Bastions.

When a new site was allocated, the ground rent was altered pro-rata to the new site, which was in fact smaller in area. "All the other data and plans contained in the proposal are still valid as the planned project in its entirety remained the same, and it was solely the site which was altered," the government said.

For the past years the company had paid an encroachment fee of €8,500 to the government for the use of the site of the 'temporary' tent structure, now set to become permanent.

MEPA paves the way

Plans to rebuild the Malta Fairs and Convention Centre on the present "temporary" site, rather than relocating it to abandoned agricultural land behind the Ta' Qali national stadium as proposed in an action plan approved in 2006, won the seal of MEPA's approval following two years of public consultation in October.

The 2006 action plan had limited the height of the convention centre on the other site to 10 metres. But the developers insisted on 17 metres' height, which raised MEPA's concern on the impact on the Mdina skyline. The new policy foresees a maximum height of 15 metres on the site of the present tent structure.

Moreover the approved policy foresees the creation of architectural features and focal points, which could even exceed this height. "These will only be considered if the merits of the design are of sufficient quality to outweigh the impacts on long distance views," the policy states.

The convention centre's footprint cannot exceed 32% of the 6.9 hectare site, and no residential accommodation shall be permitted.

Although the policy binds the owners of the convention centre to provide for the own parking needs, the approved plan also proposes the construction of a multi-storey car park by the Malta Football Association.

MEPA will encourage consultation between the Malta Football Association and the appropriate government agencies, towards the construction of the multi-storey car park on the site of the existing car park.

This site, formerly earmarked to accommodate the Conventions and Exhibition Centre, will now accommodate the motor sports activity, which has to be relocated from the area, which will be occupied by the permanent Fairs and Convention Centre.

The policy has also been amended to allocate part of the site, currently occupied by the Motor Sport for the development of a spectators' stand for the Centenary Stadium.