MFSA issues €1.1 million direct order for office space

The financial services regulator is refusing to explain why it has to fork out €1.1 million of taxpayer funds for more office space through a direct order instead of trying to get the best competitive price on the market.

Through a direct order approved by Finance Minister Clyde Caruana, who has recently insisted that ministers must cut their spending, the MFSA has reached an understanding with the owners of The Fort Business Centre in Mrieħel to lease part of their building, mainly offices and car garage spaces.

This arrangement, which should have followed public procurement rules rather than a direct order, will see the owners of the building rake in €1,112,400 over three years, or almost €400,000 a year.

It is as yet unclear whether the MFSA is paying above market rates as it is refusing to give details of the lease’s contract and the actual space rented. The MFSA has not replied to questions from The Shift.

Property industry sources told The Shift that the lease price seems “on the high side”, even though more details are needed to assess actual value for money.

“Currently, there is an oversupply of office space in the country, and prices are very competitive. Just down the road from the MFSA, in Mrieħel, there are a number of empty offices available that could be leased at less cost to taxpayers. But it seems that not all businessmen in Malta are the same as some prefer getting direct orders through their contacts in high places,” a senior property consultant told The Shift.

The beneficiary of the latest government direct order is Tal-Lira Investments Ltd, which owns The Fort office block in Mrieħel, apart from other businesses.

The company directors, Malcolm Sant and Etienne Vella, are directly involved in the management of the JB Stores of Iklin, which expanded its businesses into various other sectors, from hotels to property development.

During the past years, members of the same group had sought a controversial PA permit to convert an abandoned explosives factory in Dingli into a luxury tourist complex. However, following protests against this abuse of idyllic ODZ land, the application was withdrawn.

This is not the first time the MFSA has expanded its office space into neighbouring offices.

MFSA sources told The Shift that while it has been clear for several years that the current MFSA headquarters in Mrieħel is no longer fit for purpose, the government is insisting on leasing nearby office space at exorbitant costs through a piecemeal approach.

“It would make much more sense if the MFSA sold its building and relocated lock, stock and barrel to another location,” a senior official said.

The MFSA has been hit by a series of scandals over the past years, mainly when managed by Joseph Cuschieri, a close associate of disgraced former prime minister Joseph Muscat and son-in-law of President George Vella.

Cuschieri was issuing direct orders worth millions with little to no control from the finance ministry.

Cuschieri was forced out after having been exposed travelling to Las Vegas with Yorgen Fenech, accused of commissioning the assassination of journalist Daphne Caruana Galizia, in the company of the MFSA’s general counsel Edwina Licari.

                           
                               
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A. Fan
A. Fan
4 days ago

Always thought they sent all the ‘inconvenient’ files straight to the incinerator., so this can’t be about storage space, can it? Must be expanding the executive cocktail lounge.

Bamboccu
Bamboccu
4 days ago

The Finance minister 2 days ago ordered the ministries to save 200 million.
Jiehu min naha u jaharqu naha ohra.
Clyde ejja sa l ghalqa u flok tidhak bil poplu ejja demmel mal Bambocc.

D M Briffa
D M Briffa
4 days ago

That’s the last time I will shop at JB Stores.

Paul Bonello
Paul Bonello
4 days ago

See our regulator’s own corporate governance behaviour and the gulf between its PR and regulator circulars and its practice of same

Out of Curiosity
Out of Curiosity
4 days ago

Direct Orders galore. This is the new norm in Gov’s entities, with no respect to public procurement regulations. And the thing is that no one seems to be able to control this bad habit anymore. The NAO’s office should start with a blitz, by investigating these entities and reporting those officers who appositely breach regulations. But it requires good will.

carlos
3 days ago

Kullhadd jisrsq kemm jiflah – filli blue u filli ahmar- ir-rebgha ghall- flus u l-korruzzjoni jirrenjaw -Mafia land.

Aggie
Aggie
3 days ago

Disgusting behaviour and misappropriation of funds … MFSA should be audited by an external organisation with no connection to anyone on the island… I’ll do it !!

Paul Bonello
Paul Bonello
3 days ago
Reply to  Aggie

You say you will dot, yet you only made a comment covered by a pseudonym

John Buttigieg
John Buttigieg
3 days ago

It has become the common trend after the multimillion deal by Silvio Schembri that went unchallenged, followed last week by minister for the ageing and now this

Edward Mallia
42 minutes ago

I would have expected MFSA to move wholesale into part of the office space due to become available in the three ghastly Gasan-Fenech towers nearing completion. At reduced rates of office-space rent of course, given that the place (Mriehel) was not intended to be a high-rise area until that famous meeting between then-minister Michael Farrugia and Yorgen Fenech, which changed the Mriehel designation after the public consultation had closed. Surely one good turn deserves another.

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