Premier was prime property that should not have been commercialized – PM

‘We didn’t want long court case over shuttered Café Premier’ – Muscat

Prime Minister Joseph Muscat has insisted that his government would step in to prevent any unwarranted “commercialization” of historical spaces such as the Café Premier, the shuttered cafeteria beneath the Biblioteca in Valletta.

Muscat, who was personally involved in ‘bailing out’ leaseholders Cities Entertainment to take back the 65-year lease on Café Premier for €4.2 million, defended the price as having been “fair market value” but regretted not having included the Government Property Department at the start of negotiations.

“I don’t think that a prime property in Valletta should be commercialise by the private sector when the government has an opportunity to have its say… I don’t agree with having a fast food outlet there [beneath the Biblioteca],” Muscat said.

Cities Entertainment were facing court action for the rescission of their lease for having failed to pay the GPD their rent on Café Premier. But in negotiations held between Cities Entertainment shareholder Mario Camilleri and OPM advisor John Sciberras, a former GPD director, the Muscat administration agreed to pay Cities Entertainment €4.2 million to relinquish the lease. The cash was used to pay the company’s rental arrears, outstanding tax and VAT, energy bills, and also €2.5 million in commercial bank loans.

When asked whether he had set a precedent for future cases where private leaseholders fail to pay the State their dues, Muscat said it should be the government that pays attention to whom it grants such concessions.

“We’ll do whatever is needed. I think we have to pay better attention to who takes these concessions, whether they are able to carry them out, as in this case, which lease was granted under the former administration,” he said.

“This matter is really a procedural question,” he said about his role in taking back the property at a price when court action on the lease’s rescission had already started.

“The property was on the market. The government wanted to take its money back because the former administration had not collected its money… the Auditor General said we should have gone to court, but when the last government went to court on the Rinella film studios it spent 17 years in litigation. I didn’t want a repeat of that now that Valletta is coming up for the capital city of culture.”

Muscat laughed off suggestions from the Opposition of any corruption in the deal, after shareholder Mario Camilleri claimed a €210,000 payment for himself from the €4.2 million deal.

Camilleri told The Times that he had not donated any cash to the Labour electoral campaign and that the Café Premier bailout was no pre-electoral deal. As it happens, Camilleri donated €2,000 to the PN in the 2013 election and the MEP elections last year.

“I think the NAO was right about having left out the GPD,” Muscat conceded. “They were our first weeks in power. We involved the GPD at a later stage.”