MIDI ‘bailout’: PR, branding, consultants, travel included in Manoel Island payout by taxpayers

More shocking details are emerging about the costs taxpayers are being forced to shoulder as part of the government’s deal to reclaim Manoel Island from MIDI plc.

A ‘strictly confidential’ report commissioned for the Lands Authority earlier this year and seen by The Shift reveals that Prime Minister Robert Abela and Finance Minister Clyde Caruana agreed to base the reimbursement calculations on virtually all expenses submitted by MIDI, regardless of whether they were directly linked to the restoration of Manoel Island.

Despite repeated public assurances that only verified restoration costs would be reimbursed, Abela and Caruana agreed to cover a substantial portion of unrelated expenses incurred by the developer over the past 25 years.

According to the verified findings, actual restoration works amount to just over €12 million. Yet the agreed package stretches to €42.7 million, with taxpayers expected to absorb a range of additional costs.

According to the confidential report, these include part-reimbursement for MIDI’s spending on public relations, branding, photography services, consultancy work, and business studies conducted by major firms such as PwC and KPMG. The reimbursement also covers legal fees, corporate finance advisory services, travel expenses, and other operational costs that are not directly related to the restoration of the historic site.

The confidential report underpinning the deal was prepared for the Lands Authority by Alecta Advisory, a small audit firm owned by Anita Aloisio, a former shareholder in the now-defunct Nexia BT. During her time at Nexia BT, the firm was at the centre of some of Malta’s most serious financial crime scandals and gained notoriety for setting up offshore companies in Panama for senior government officials exposed in the Panama Papers, and later became embroiled in multiple criminal investigations.

Aloisio’s financial breakdown reveals that, beyond restoration works, millions are being allocated to cover MIDI’s broader business operations. These include €15.2 million in premium and ground rent, €8 million in design and Planning Authority fees for a project that was never realised, €2.6 million in salaries, €1.5 million in professional and legal fees, and over €1 million in security services.

Taxpayers are also set to cover €2.5 million linked to Fort Tigné, a public asset that MIDI was reportedly in the process of selling, and €0.5 million for the company’s own offices on Manoel Island.

Insiders told The Shift that the government’s proposed agreement shifts the financial burden of a failed private development onto the public.

Although presented by Prime Minister Robert Abela as some political achievement, the deal is raising serious concerns within government circles, particularly given that authorities had long maintained that MIDI was in breach of its concession and that the contract could be rescinded without compensation, aside from potential legal costs.

The €42.7 million payout is more than three times the restoration costs repeatedly cited by the Prime Minister, undermining the government’s central justification for the agreement.

Robert Abela has yet to explain why taxpayers are being asked to fund such a broad spectrum of expenses.

The agreement also ignores millions in revenue generated by MIDI during its 25-year presence on the island, including income from event rentals and marina operations.

This directly contradicts Abela’s earlier insistence that the government would not be “buying back” the island, but simply reimbursing “verified expenses” tied to works carried out.

According to government sources, the deal ensures that MIDI recovers not only its investment but also operational costs and losses associated with a project it ultimately failed to deliver.

The timing of the agreement is also significant.

MIDI is facing a €50 million bond repayment due in July, and the company lacks the liquidity to meet this obligation without government intervention.

The deal also marks a sharp U-turn by Robert Abela.

In 2025, he warned that cancelling the concession could expose taxpayers to massive liabilities. Weeks later, following sustained public pressure, he reversed his position and pledged to return the island to the public.

While the agreement still requires parliamentary approval, the government can push it through with a simple majority.

The deal sets a dangerous precedent, potentially encouraging other developers to seek compensation from the government for failed concessions, leaving taxpayers exposed to further multi-million-euro claims.

MIDI forwarded the following as comment following the article’s publication:

“The article is based on the premise that MIDI was, or is, in default of its obligations under the Emphyteutical Concession entered in 2000. MIDI has denied this categorically and repeatedly. The fact that government asserts that there was a breach does not make it so.

MIDI was entitled to automatic extensions of the completion date under the express terms of the Deed. Once that is accepted, as it must be, on any proper reading of the Deed and the documented history of the project, everything else follows. The company has the right to continue developing Manoel Island. It has agreed to a framework which, once executed, will result in the surrender of that right – a right it held legitimately and which it exercised in good faith throughout the duration of the project.

The amount offered as reimbursement falls significantly short of the investment actually carried out on Manoel Island. That investment was made with the legitimate expectation – grounded in the terms of the deed itself – that the company would develop Manoel Island as a high-end mixed-use development. That expectation was reasonable, and it was frustrated not by any failure on MIDI’s part but by circumstances entirely outside its control.

MIDI’s acceptance of the proposed reimbursement was a pragmatic decision made in the interests of its shareholders and bondholders, the full reasoning for which will be set out in a circular to shareholders to be published shortly. It does not represent, in any sense, an admission of default or breach.

Government’s own independently appointed auditors verified the company’s expenditure at €66.4 million. The amount offered falls approximately €23 million short of that verified figure. That is clearly not a concession by government, and not a bailout. Government was far from generous.”