MIDI confirms its acceptance of government ‘bailout’ for Manoel Island

MIDI plc has formally accepted a government offer to relinquish its 99-year concession over Manoel Island and Fort Tigné in exchange for a multi-million-euro payout, confirming revelations published last week by The Shift that the deal amounts to a de facto bailout.

In a company announcement on Tuesday, MIDI plc confirmed that it had reached an in-principle agreement with the government to partially rescind the emphyteutical deed signed in 2000. The agreement will see MIDI surrender its rights over Manoel Island and Fort Tigné, while retaining control of the Tigné Point development.

The company confirmed it will receive €47.3 million in compensation, or around €43 million net after VAT adjustments. The payment closely mirrors a €50 million bond issue that MIDI must repay in July, reinforcing concerns that public funds are being used to shore up the company’s finances.

Without this injection, sources said, MIDI would have struggled to meet its financial obligations.

The developer has long faced criticism for failing to deliver the Manoel Island project in line with the original concession terms, which envisaged a large-scale mixed-use development, while focusing its energy on the lucrative Tigné Point development.

More than two decades later, works on the island remain largely limited to restoration efforts on Fort Manoel.

Despite previously arguing that MIDI was in breach of its contractual obligations, Prime Minister Robert Abela made a U-turn, opting to negotiate a settlement rather than revoke the concession without compensation.

Industry insiders described the payout as “very generous,” noting that taxpayers were effectively covering the developer’s liabilities.

The agreement remains subject to several conditions, including finalisation of the rescission terms, approval by parliament, and shareholder endorsement at an extraordinary general meeting.

MIDI said it will issue further details in a circular outlining the financial impact of the transaction and the board’s rationale for recommending it.

The deal also factors in restoration works carried out by MIDI, particularly on Fort Manoel, as well as the transfer of Fort Tigné back to the State. The company had previously explored selling the fort to Gozitan businessman Joseph Portelli.

Negotiations have unfolded amid mounting financial pressure, with MIDI facing a €50 million bond maturing in July.

Originally granted in 1992, the concession was intended to transform Manoel Island into a flagship development complementing the completed Tigné Point project. Yet decades of delays have left the island largely untouched, fuelling ongoing public debate over accountability and the use of public property.

With the agreement now moving toward formal approval, questions remain over whether the State could have reclaimed the land without compensation and whether this settlement sets a precedent for future concessions, as other bonds due to mature this year also face difficulties.