Gozo Channel scandal: €1.8 million paid for leased office still closed

A scandal surrounding the lease of a former supermarket in Mgarr Gozo to be used as an office for Gozo Channel continues to unfold as research conducted by The Shift shows that taxpayers have already forked out €1.8 million for a private building leased more than six years ago and still unused.

According to open-source data, as reported in the Government Gazette and the government’s electronic tenders platform, six years after Gozo Channel started the lease, more than €1.4 million was paid from state coffers to convert the supermarket into offices. Structural modification is still ongoing.

The ten-year lease contract, costing taxpayers €63,000 per year, has been in effect since 2019 and will expire in less than four years, at which point its original owners will be handed back a state-of-the-art office block, paid for by taxpayers.

The building’s owners are Joseph Hili from Xewkija and his two children. They receive €5,250 a month under the name of their company, A&J Hili Ta’ Miema Ltd.

The Shift revealed that the owners of the former supermarket were clients of Joe Cordina & Associates – a private audit firm owned by Joe Cordina, the chairman of Gozo Channel.

So far, the Hilis have already received €390,000 in rent from state coffers, even though no Gozo Channel employee has ever set foot inside their building.

The former supermarket building, located in Triq ix-Xatt, Mgarr, was leased in 2019 and was required to be used as offices a year later.

Yet, following the signing of the contract, Gozo Channel discovered that the premises had severe structural damages, which required parts of it to be completely demolished and rebuilt.

Instead of terminating the contract and returning the defective building to its owners, Gozo Channel decided to undertake all the work at its own expense, resulting in massive costs and interminable delays.

Now that the lease contract is nearing its end (2029) and while works are still ongoing, Gozo Channel has reached a new deal with the Hilis.

Instead of asking them to cover the expenditure made to rebuild their building, Gozo Channel asked for compensation for an 18-month lease.

This means that the Hilis will be foregoing €97,500 in lease income in exchange for €1.5 million in payments made by the government to cover their office costs.

So far, no investigation has been launched on this project.