Informal discussions ongoing on planned development of Selmun Hotel

National airline Air Malta and the Malta Environment and Planning Authority are currently engaged in “informal discussions” on the possible development of the Selmun Palace Hotel.

In reply to a question raised by PN MP Censu Galea, Prime Minister Joseph Muscat also said that, as yet, no formal applications were submitted to MEPA.

According to Galea, there are plans in the pipeline for “a big expansion” of the hotel.

Air Malta – in its fourth year of a restructuring process as mandated by the European Union – is expected to “transfer” its shuttered hotel, the Selmun Palace, to the state, which will then divest itself of the property.

The European Commission, in October, confirmed with MaltaToday that the government’s planned acquisition of Selmun Palace hotel does not constitute state aid if the purchase is based on market prices.

“A sale would not involve any state aid if the government paid a market price for acquiring the property,” a spokesman for EU competition commissioner and Vice-President Joaquín Almunia told MaltaToday.

He however pointed out that the Commission “has not assessed if this is the case”.

This was confirmed by a tourism ministry spokesperson who told MaltaToday that Air Malta’s divestiture of Selmun Palace is part of the 2012 restructuring plan which was agreed to by the EU Commission under the previous Nationalist administration.

“Any transaction will be in accordance with EU rules and in line with past practices which have already been screened by the European Commission in similar situations, when other Member-state airlines transferred part of their portfolio of assets to their respective governments.”

This, the spokesperson had said, “is only one of a number of measures that will be implemented in the coming months which will ensure that the airline returns to commercial viability by 2016.”