Who takes Manoel Island yard's keys? The Transport Authority chief, and the marina developers he must regulate

Mark Portelli is shareholder in Virtù Steamship, which forms part of the Manoel Island Yacht Yard Ltd: Bezzina Ship Repair, Mizzi Holdings, Hili International, and Midi – the developers of Tigné Point and Manoel Island.

The yard is being transferred on a 30-year concession, during which the new company would invest €18.8 million. The company has paid €5.5 million up front apart from bidding with an offer of €12.5 million. They will pay an annual rent of €225,000 a year, to increase by 15% every five years; an additional €265,000 per year for the first 10 years. Another €6 million is to be invested in upgrading the facility.

As maritime regulator, few questions have been made of Mark Portelli’s position and whether he opens himself up to a possible conflict in his role as chairman of Transport Malta.

The privatisation process was carried out by government’s investment arm Mimcol. The finance ministry has previously disregarded claims of Portelli’s alleged conflict of interest, having been chairman of the maritime authority and now heading the super transport authority for land and maritime transport and aviation. The ministry stated that yacht repair facilities have nothing to do with his remit.

However Portelli is now in business with firms which are involved directly in the marina industry: such as Midi, which has the marina concession at Manoel Island.

Mimcol’s valuation of the Manoel Island yacht yard was also carried out by auditors PricewaterhouseCoopers, who are also consultants to Midi plc on the Tigné Point and Manoel Island projects. In the enterprise valuation on the yacht yard, PWC predicted favourable market conditions for the yard due to “the privatisation of the government owned marinas” which would generate more yachting activity.

Back in April 2009, the maritime authority - under Portelli - announced the opportunity to expand the existing marina at Ta’ Xbiex (Gzira Gardens), with an additional 100 berths, provided the area is protected by a breakwater Midi plc must develop off Manoel Island, as contemplated in the outline development permit issued by MEPA in their favour. Once the development of the breakwater is completed, the Authority would issue a request for proposals for the privatisation of the Ta’ Xbiex marina.

But PricewaterhouseCoopers also said in its report that it would not adjust its valuation to “reflect the potential upside from these developments” because of the uncertainty of timing of the Midi land reclamation project: namely, the breakwater that Midi must construct at Manoel Island before work on a marina at Ta’ Xbiex starts. So PWC tagged the sale of the yacht yard at between €10-€13 million: and the consortium bid with €12.5 million.