The government has negotiated, as already reported in this newspaper, a contract which had pre-conditions attached. This new agreement will ensure that the whole project is completed within three years of the relevant permits issued by the Malta Environment and Planning Authority.

And the government will be paid Lm3.7 million for its 49 per cent shareholding from the previous agreement. “But the most important thing is that the project is completed in good time. If the new developer fails to complete the project, it will automatically go back into government hands,” the source said.

However, with the one-time payoff, the government will rescind its right to Lm12,000 per year ground rent and the 24 apartments which the original developers had agreed to pass on the administration on completion.

The project’s major change is that the developer, Michael Caruana, has the right to decide whether he wants to develop a hotel at Fort Chambray or another set of apartments. “He has a year to decide what he wants to develop. But he must stick to the three-year time frame and be in conformity with all the stipulations in the Mepa permits,” said the source.

Apart from the Lm3.7 million, the government will also receive the capital gain on the apartments once they are sold. “The new developer will also buy the government’s shares, as well as take on board the loans taken out by the previous developers,” he said.

The source said that while this probably amounted to a substantial sum, he was sure that Dr Caruana had done his homework. “He knows what he is in for, he knows what has to be spent and he knows what final return is going to be,” said the source.

The source said that at the end of the day, the government’s priority was for the project to be completed. He said that once the project was finished a government official would inspect the site to see that everything was up to standard.