13 December 2006

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Business Today

Holiday Inn developer loses bid bond

• Government has already informed other bidders
• George Muscat meeting senior ministers over debacle

Karl Stagno-Navarra

George Muscat, the prospective developer of the former Holiday Inn and Fort Cambridge is reported to have met a senior government minister yesterday, three weeks after he lost a bid bond estimated to be approximately Lm100,000 following his failure to sign the multi-million contract last November 30.
Other meetings are expected to continue this morning, a public holiday, at senior government level, in an attempt to conclude on the matter that has been stalled for the last weeks.
While details about the meetings remain unclear, deputy prime minister Tonio Borg told Business Today yesterday evening that “government will stick to the original conditions as laid out in the brief”.
Adamant on government’s position, the minister, who is also responsible for the Lands Department that is handling the matter, added that “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.
Other bidders contacted yesterday 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 that he is “more than confident” that with goodwill from all sides, “an amicable solution will be found and the contract will be signed”. While keeping clear from identifying the minister he met with yesterday, George Muscat said that he was satisfied that the meeting was “very positive”. The entrepreneur’s offer for the purchase of the former Holiday Inn complex in Tigné totals a staggering Lm23.3 million.
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, to the extent that he has paid their salaries amounting to Lm50,000 every month until 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 has 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. “I cannot pay for something that I did not tender for,” he insisted, adding that he believes that the impasse could definitely be solved “should government realise that through goodwill all could be overcome”.
On 28 June, Muscat applied with MEPA for the demolition of the Crowne Plaza Hotel, and is still seeking permission for the construction of six apartment blocks containing 386 flats and a four-level underground car park. His company Imperial Point was the highest bidder out of seven tenders received by the government for the purchase of Tigné Development Company, a subsidiary of Air Malta.
Muscat is a major entrepreneur whose company interests straddle a myriad of development companies, amongst them Bay Street Holdings, Legend Real Estate, and Tigné Estates, whose controlling interests are G Muscat Holdings and Tumas Group’s Easysell.
Should his offer still be accepted, George Muscat will also have to restore the Cambridge Battery and provide alternative employment for the former employees of the Holiday Inn. He told Business Today back in July that “a very satisfactory agreement” with the General Workers Union had been reached.
In Tigné, the Fort Cambridge development brief foresees a 16-storey tower which is set to accompany high-rise development in the MIDI project, where the maximum height allowed is 22 floors.
According to George Muscat, his project is estimated to reach Lm50 million just for the first phase of the whole project. The six other companies which submitted tenders for the purchase of Tigné Development Company Ltd were Fort Cambridge Company Ltd (Lm23 million); NYSIR Malta Ltd (Lm22.1 million); Hili Property Development Ltd (Lm13 million); Schembri & Sons Ltd (Lm12.8 million); Cambridge Construction Ltd (Lm11.5 million); and Cambridge Pace Ltd (Lm11.1 million).

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