The bombshell dropped by Investment, Industry and IT Minister Austin Gatt in parliament on Thursday that he had warned the investors behind the SmartCity project to take a decision or else the government would pull out of the negotiations, answers many questions and raises many others.

The SmartCity project, estimated to cost around Lm100 million to develop, is an important investment for the Maltese government and, particularly for Austin Gatt, who since 2000 has been working hard to turn Malta into an ICT centre of excellence in the Mediterranean.

The Heads of Agreement signed last year was the first concrete sign that the government and Tecom Investments of Dubai were on the right track. Although details of what the project would consist of were sparse, by early July it became clear that this was not going to be another “industrial park” but a massive town development.

Warning bells started to toll just before parliament rose for the summer recess because the final agreement had not been concluded. Five months later, and after numerous questions by opposition MPs, the government said that the negotiations were nearly concluded but a few “critical” points remained to be ironed out.

Dr Gatt’s announcement last Thursday made that morning’s parliamentary sitting extremely interesting and the ministry, aware that the minister’s comments would hit the front page, made sure that the media got the correct message.

The message from Dr Gatt is simple, clear and justified. He had already stated in the past that Malta needs foreign investment, but not at the country’s expense. On Thursday, Dr Gatt gave the same clear message: We do want this investment, but not at all costs. This is the approach any serious government would take. Dr Gatt’s warning to Tecom Investments to reach a decision on “crucial” elements – indirectly saying the government would not budge an inch – was not a rash decision and he had more than five months of delayed negotiations to back up his arguments. He simply stated the government’s negotiation position.

But where does that leave the government, Tecom Investments and the SmartCity project?

First of all, the negotiations are still ongoing. Despite the temptation – which some sections of the media gave in to – to splash the word “failed” on the SmartCity file, the project has not foundered. The risk is there but the country has to be confident enough that the government knows exactly what it is doing.

Taking a more negative perspective, the government has invested a lot and a lot of energy, effort and credibility in this project. Dr Gatt’s whole political career of the past five years rests on this single Lm100 million project, so there is no doubt that he will not be giving in that easily. But more than just the government’s or a minister’s credibility, there is a huge amount of investment that is riding on the future success of this project. Most of it is in Malta because the conditions and the facilities are second to none but, to be honest, SmartCity also features the investors’ future plans.

Third, Tecom Investments have also been giving a clear warning that the government of Malta is no pushover. Tecom will by now have realised that a lot of its hard work could also go up in smoke because it is haggling over a few critical issues that it probably knows the government of Malta will never concede.

At this stage, the government needs to be given some breathing space to conclude the negotiations. Speculation at this stage will only put pressure on the government and on Tecom’s negotiators.

For too long has SmartCity been used as a political football. This is an excellent investment opportunity for Malta and its people. We hope that by the next time Dr Gatt stands up in parliament, he will throw another bombshell to announce that negotiations have been concluded.

Even better, he may announce a new investment of the same calibre. Dr Gatt hinted as much in his speech last Thursday.