Budget blunder confirms irregularity of Café Premier bailout

The finance minstry’s blunder to have an earlier version of a budget implementation plan uploaded on its website, has left Prime Minister Joseph Muscat with egg on his face over the controversial €4.2 million ‘bailout’ to the former operators of the iconic Café Premier in Valletta.

In 2013, Muscat accepted to pay Cities Entertainment €4.2 million to vacate the premises beneath the National Library, and rescind their 60-year lease on the public property.

The deal was controversial because the money was used to pay back the State its dues on tax and utilities and also Cities’ private bank loans.

But the Labour government’s spin on the need to reclaim the café so as to provide ‘vertical access’ to the overlying Biblioteca seems to have fallen flat, after the erronerously issued budget document stated that the Café Premier had to devolved to the Valletta local council.

On Tuesday, the government followed suit to have the council take up the Café Premier despite not being announced officially in the Budget speech read out by finance minister Edward Scicluna.

But Nationalist whip David Agius has hit out at Muscat, questioning why he paid Cities Entertainment to move out when the government had filed court action to rescind the original lease after Cities failed to pay its rents.  

“If the government is now devolving the Café Premier to the local council, having obtained it by wasting €4.2 million on it, it only confirms the vitiated manner of the original bailout: if the government wanted to acquire it for the council, why have it lay vacant for two years and a half?” Agius asked

“If on the other hand, it only decided now to devolve it to the council, why did Muscat so hurriedly negotiate a €4.2 million bailout in just three months back in 2013 when the government could have recouped the property by court order for the rescission of the lease [Cities Entertainment Ltd]?”

Agius said the previous government had tried to have the council move into the Main Guard which currently houses the Attorney General’s offices, which is why a property on Republic Street was acquired to house the AG and other judicial entities housed in the Presidential Palace.

Agius said the PN had no objection to the devolution but said the Budget speech blunder proved the lack of planning and irregularities in the process through which the Labour government paid out Cities Entertainment. “It was a vitiated process that confirms the stench of corruption in the affair,” Agius said.