[WATCH] 'No precedent set with Café Premier deal' - head of civil service

'No precedent set with Cafe Premier deal' - Mario Cutajar

Principal Permanent Secretary Mario Cutajar insisted that no precedent was created when the government reacquired a 65-year-lease from Cities Entertainment Ltd for €4.2 million.

Replying to MaltaToday questions during a press conference on embellishment works at Castille Square, Cutajar insisted that no precedent had been set because "things were carried out as they should be".

"We have nothing to hide, so much so that the Prime Minister gave me clear direction of full disclosure when the NAO started its investigation," he said, shooting down the suggestion that other tenderers may seek a similar settlement if they can't live up to conditions on government leases and contracts.

Last Saturday, PL deputy leader Toni Abela called for a blacklist on tenderers for public contracts, if they fail to pay their dues to the state.

However, Cutajar was much more wary on suggesting a blanket blacklisting, arguing that such a proposal would need to be properly discussed.

"One must first discuss blacklisting and such ... this is a very pro-business and objective governemnt and we cannot just take blanket decision," he said.

Cutajar also said that the Cabinet had been fully informed of the details of the case when asked whether the ministers had been aware that half of the Premier bailout would be used to settle the owners' bank loan. He said that the Auditor General's report had reported that the sum paid for the property reflected market value.

Of the total sum, the owners had to pay back €307,346 to settle outstanding arrears with the government property division and €504,000 in capital gains tax owed on the land. The sum of €192,748 also had to be paid to the Inland Revenue Department to settle income tax and social security payments. 

€227,058 went to the VAT Department on outstanding dues and legal procedures against the company, and €130,963 in energy bills were paid to ARMS. €210,000 were paid to the company's own shareholders M&A Investments - a 5% commission on the €4.2 million - and €3,265 to creditors Golden Harvest. 

Finally, another €2,560,800 was paid to Banif Bank, in settlement of the outstanding bank loans that Cities Entertainment held with the bank, payable in four instalments.