At a press conference given in the afternoon, Dr Gatt replied to what Dr Sant had said on Sunday. But following an interview with Dr Sant on Super One, the minister came back within minutes, claiming that Dr Sant had been passed sensitive information from within Bank of Valletta and demanding that the bank investigates how sensitive banking information regarding the relations between itself and a client came into Dr Sant’s hands. Dr Gatt also denied what Dr Sant tried to sustain by his interview.

Speaking at Msida on Sunday, Dr Sant said that government spent Lm4 million on the Freeport subsidiary in Brindisi last August when it knew that the Brindisi subsidiary is facing bankruptcy.

This, countered Dr Gatt at his press conference, is “a pure invention” based on a completely mistaken interpretation of information that Dr Sant already has.

Two weeks ago, Dr Gatt added, he himself had tabled the accounts of all subsidiaries of the Freeport and of the Malta Freeport for four years.

The accounts for 2003 state that “During the current year, the company entered into an agreement with another shareholder of Brindisi Terminal Spa to acquire its share in the company for a total consideration of E351,000 (including related professional fees), equivalent to Lm149,127. Following this agreement that was executed in February 2004, this investee became a 99.65 per cent owned subsidiary of Freeport Terminal (Malta) plc.”

This was also contained, Dr Gatt added, in a reply sent by his ministry to the Labour Party paper KullHadd two weeks ago.

The minister gave a short history of the Malta Freeport’s foreign investment. In 1994, the Gioia Tauro Freeport started becoming an aggressive and direct competitor to the Malta Freeport in trans-shipment matters. Gioia Tauro’s advantage was that it was situated on the continent, so any trans-shipment which reached it could continue its journey on land.

It was in the interest of the Malta Freeport to have direct access to the continental landmass, so it was decided that it should try and get a port in Italy to act as its strategic partner.

In 1997, under Dr Sant’s administration, the strategy was drawn up and Papalini Srl was chosen as the strategic partner. Terminal Italia Spa was thus set up with shares to manage the port of Taranto.

But the application by this new company to manage the port of Taranto was unsuccessful, since on 15 January 1998 this concession was given to Evergreen, which moved there from Gioia Tauro which in turn took over Grand Alliance from Malta.

Following this failure, the Malta Freeport, once again in conjunction with Papalini, started looking at the port of Brindisi.

In August 1998, still under the Labour administration, Minister John Attard Montalto took part in a ceremony at which an agreement was signed between the Malta Freeport and the Brindisi mayor, Giovanni Antonino, (who is now attacked in the Labour papers for being involved in corruption in Italy, Dr Gatt added) to explore ways in which the port of Brindisi could be used for trans-shipment in conjunction with Malta.

Less than three months later, on 3 December 1998, the Brindisi Terminal Spa was set up between the Malta Freeport, Papalini and the Comune of Brindisi.

By then, Dr Sant was no longer prime minister, but the strategy that was being implemented was his, and it was a good one, Dr Gatt said.

The shareholding was as follows: 40 per cent each by the Malta Freeport Terminal plc (a subsidiary of Malta Freeport) and Papalini, and 20 per cent by the Comune of Brindisi.

The agreement regarded an area of 200,000 square metres (half the area of the Malta Freeport) with a quay 450 metres long and 14 metres sea depth. The agreement was for 30 years at a lease of Lm32,000 a year.

The agreement also stated that the Brindisi port authorities committed themselves to enlarge the quay and to invest a further Lm14 million in equipment and machinery.

However, this commitment was not kept.

Management was meant to be in the Papalini hands while Malta Freeport was to do the marketing.

The Brindisi terminal started operations in May 2000 and attracted two big operators. In November 2000 Brindisi Terminal Italia borrowed E10.7 million to purchase equipment. This loan was guaranteed by Freeport Terminal (Malta) and Papalini. The government of Malta is not guaranteeing this loan.

Due to this capital investment, the shareholding of the company was changed at end 2002: the Comune’s shareholding went down to 0.416 per cent of the shares, while Papalini increased its shareholding to 59.4693 per cent.

By this time, however, the Brindisi terminal had run into difficulties. No investment had been carried out, although it had been promised, and shipping lines began to leave, as the quay had not been lengthened.

In November 2002 one of the banks which had loaned money to the terminal, Monte dei Paschi di Siena, wrote to Malta Freeport to tell it that Brindisi Terminal Spa had fallen behind in its payments.

In June 2003 the majority shareholder of Brindisi Terminal, Papalini, was declared bankrupt. This meant that all the guarantees which had been given to the banks, amounting to E26.7 million, now became the responsibility of the Freeport Terminal (Malta) plc.

In February 2004, to safeguard its interests, Freeport Terminal (Malta) plc bought the Papalini shares in the Brindisi Terminal paying E351,000, or 10 per cent of the nominal value of the shares.

Had this not been done, Brindisi Terminal would have been declared bankrupt and Malta Freeport would have had to pay all the guaranteed E26.6 million.

An agreement was then reached for the re-financing of the loan. There is now a programme for the repayment of the loan at a less steep rate.

The Malta Freeport is now controlling the terminal operations to reduce losses. The number of people employed at Brindisi has now been cut to 17 and CMA-CGA have began a weekly service between Malta and Brindisi.

The Malta Freeport is now seeking to sell its share in Brindisi Terminal Italia because this investment no longer figures in the strategic aims of the Malta Freeport Corporation after its privatisation.

Meanwhile, Malta Freeport, through Brindisi Terminal, is trying to get money due from Papalini.

The main intention of the Malta Freeport has been to ensure that the value of the shareholding, the concession to operate the Brindisi terminal, is not lost, as it would have been had it been declared bankrupt.

Dr Gatt was scathing in his concluding remarks on Dr Sant. Could it be, he asked, that Dr Sant’s real intention is to disrupt the privatisation process just as he tried to disrupt the negotiations with Skanska?

The fact remains, Dr Gatt said, that the strategy to go for an Italian port was honed in Dr Sant’s time and Papalini were identified as the strategic partners under Dr Sant’s administration.

Having said that, this was a business deal, which as all business deals, could go either way.

The original strategy, that of acquiring a port on the mainland, is no longer valid for Malta Freeport. This is being sold to CMA and, if anything, it will be CMA which will have to think along these strategic terms.

Dr Gatt said, in reply to questions, that this is a totally different situation from the case of Azzurra Air. With Azzurra, it had been a case of a glut of planes while in this case there are far too many ships seeking ports on the mainland.

He also emphasised that one must distinguish between the Comune of Brindisi, which was a former shareholder in the terminal, and the port authorities. It was the port authorities who did not do what they committed themselves to do, not the Brindisi commune.

Dr Sant’s words to Super One were not published by the Labour Party website by the time we went to print. Nor did the party issue any statement, as it usually does.

Replying to Dr Sant, Dr Gatt stated that Dr Sant had “confirmed” that the government spent Lm10 million in August to buy the Brindisi Terminal Italia shares.

This, Dr Gatt once again confirmed, is a “complete invention” on the part of Dr Sant. The shares were bought in February, not in August, and at a cost of Lm145,000 as confirmed by the audited accounts.

The Lm10 million, then, are not Maltese lira but Euros and they have been used, as the minister said earlier in his statement to the press, to reduce the exposure of Brindisi Terminal Italia.

The minister concluded by deploring that information of a purely banking relationship between a client and Bank of Valletta had ended up in Dr Sant’s hands and he asked the bank to investigate this leak.