The House of Representatives convened in a plenary session yesterday, to discuss the hot potato du jour – the SmartCity project. After it failed to get a unanimous vote in the National Audit Office Accounts Committee, the Minister for Investment, Industry and IT Austin Gatt had no choice but to present a motion to discuss the transfer of land to SmartCity (Malta) Ltd in the parliamentary chamber.

Minister Gatt said that SmartCity is the biggest project ever brought before parliament, is the one offering the largest number of jobs, and is proof that the government has won the war of transforming Malta’s economy, ushering in the “new economy”.

In 1999, Dr Gatt said, the government had a vision to overhaul the economy, by switching the pillars of manufacture and tourism to a modern kind of manufacture and a different kind of tourism, and by introducing the third pillar of Information Technology.

“We believed that IT could be a major column of our economy,” said Dr Gatt. “In spite of the many Jeremiahs running underfoot, we believed that we have capable people in Malta, and have created courses to train others, in order to make Malta a formidable IT base in the Mediterranean.” In fact, said the minister, Malta’s e-government system has been recognised as being the best in the European Union.

Referring to a report published by KPMG consultants in conjunction with economist Prof. Lino Briguglio, and commissioned by his own ministry, Dr Gatt said the numbers themselves were impressive. The report, which assesses the socio-economic impact of the project, states that the direct input to the GDP, at current prices, will be Lm4.3 million in 2007, rising to Lm219.4 million by 2018. The government, said the minister, will earn – directly from various taxes – Lm700,000 in 2008, reaching Lm49.4 million over the subsequent 10 years.

New jobs, created directly and indirectly during the development phase, will reach between 410 and 630. Employment supported by the operational phase, directly and through the multiplier effect, may peak at 10,500 by 2018.

The minister also said that the returns and their effects could be greater if one considered the super-multiplier effect, ie if companies had to reinvest a portion of their profits into the SmartCity project. Another bonus for the country, Dr Gatt pointed out, comes from being associated with investors of international repute, who will be advertising Malta whenever they sell the project.

By way of reply to certain “strange” questions that Dr Gatt said the opposition asked during Monday’s committee session, the minister gave brief details on the companies and investors behind SmartCity. The government of Malta owns a direct share of nine per cent in the project, whereas SmartCity Dubai FZ-LLC, registered in Dubai, will own 91 per cent of the base company. SmartCity Dubai is, in turn, owned in its entirety by Tecom Investments FZ-LLC, which is also registered in Dubai and which is chaired by Ahmad Bin Byat, who is the secretary-general of the Dubai cabinet – the Executive Council. The bigger fish behind Tecom is Dubai Holdings, whose chairman is Mohammad Al Gergawi, who also chairs the Executive Council. Beneficial owner of Dubai Holdings, said Dr Gatt, with a share of 99.67 per cent, is General Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai. Referring to one of the question asked by Labour representatives, Minister Gatt exclaimed that the MLP want the government to go to the sheikh and ask for a bank guarantee.

When the government sold its share in Maltacom to Tecom Investments, the company paid the Lm94 million from cash reserves in-hand, said Dr Gatt, and therefore the government has no doubt about the integrity of the investors.

Moreover, he said, and in spite of having a minority share, a number of safeguards have been built into the contract: one third of the investment has to be in equity, the government will have the final say on building specifications, the five-metre public foreshore cannot be modified without government approval, and public spaces – amounting to one third of the project area – will remain open 24 hours a day, seven days a week. Also, if the ICT part of SmartCity is not built within 14 years, and if the promised 5,600 jobs are not created, Tecom will be fined Lm400,000 in each case.

Urging the opposition not to put forward petty criticisms, Minister Gatt said that SmartCity is a project for Malta and not for the PN government. And yet, the minister said that government’s “true vision” was to build the project in the south, a traditional Labour bastion, to show the citizens there who really believes in them. Dr Gatt also criticised green journalists for not mentioning anything about the fact that all the buildings will be erected to the internationally recognised LEED silver-rating.

Labour spokesman for Foreign Affairs and IT Leo Brincat said his party welcomed with open arms any investment that will increase jobs and productivity. However, it was the duty of the opposition to table questions whenever it has doubts about a proposed project. Highlight-ing how he and the party have already expressed their support for the project through public statements and by visiting the Dubai SmartCity, Dr Brincat said that one of the criticisms the MLP levelled was the way in which the announcement of the project in 2006, and the start of this discussion, both coincided with local council elections. Dr Brincat also said that he had asked Minister Gatt to treat this project with more professionalism than he had shown in his dealings with Gamma Textiles.

Criticising claims made by the Nationalist media that Labour’s negative vote on Monday could delay the project, Dr Brincat quoted from a list of cuttings from PN newspapers that show that the project has been delayed by government itself.

Dr Brincat remained in possession, and Minister Gatt adjourned the discussion to today’s session.