Malta is set to land itself a bumper deal to set up a SmartCity in the Ricasoli area.

Around Lm110 million is planned to be invested over an eight-year period by the owners and operators of the hugely successful Internet City in Dubai.

The Maltese government’s only capital outlay will be the land on which the SmartCity will be built by Tecom Investments, Minister Austin Gatt said yesterday.

The company will also be bound to provide some 5,600 jobs and penalties will be incurred if these targets are not met, the Industry, Investment and IT minister said.

This is the first time that Tecom is investing in the European Union.

“There is a gap in the European market and Malta has beaten off competition from four other challengers to reach this stage of framework discussions,” Dr Gatt said.

He added: “A signing of a heads of agreement will take place in the coming weeks to cement the deal.”

SmartCity@Malta is projected to be the largest ever ICT private sector project and foreign direct investment, as well as the largest ever new source of knowledge-based jobs to be secured by Malta.

Tecom Investments is a leading full service telecommunications network operator and service provider and are the originators, developers and operators of the “Dubai Internet City”, which groups together over 700 tenant ICT companies: the world’s largest managed entity for ICT providers.

Tecom are also the originators, developers and operators of “Dubai Media City” (grouping together over 900 tenant companies) and the “Knowledge Village”, which houses over 260 educational institutions in a single campus. Collectively, these zones employ over 15,000 employees.

Dr Gatt said that the first tenants should be ready to move into their offices in 2008 – but the construction project will carry on into 2016. He said that the actual park should generate 3,600 jobs directly, while an additional 2,000 will be created through ancillary services such as hotels, recreational parks, shops, and others.

He said that jobs in the ICT sector left much more added value than those in textiles, for example.

“We want to attract industry that is relevant today, not the past. ICT jobs carry an added value of some E50,000 each rather than the E5,000 that comes with the textile sector,” he said.

“Malta can meet this challenge. We are entering into this project with the concept of holistic development. The public spaces that are involved will return to the government, however their upkeep, including that of the roads will remain Tecom’s responsibility,” said Dr Gatt.

He continued: “We are making a political statement. We want to bring jobs and regeneration to the south of Malta and this is the perfect project to do that.”

He said that the Ricasoli industrial estate was in an absolute mess.

“We started off with five potential sites, but it was rounded down to two – Ricasoli and Pembroke. In the end we decided on Ricasoli because we want to give it a new lease of life,” said Dr Gatt.

He said the government will be given a small share in the development company and will get dividends on shares.

“The multi-national companies that will have fully functional offices staffed in Malta will be paying tax here, so the government will also make money through income tax,” he said.

Existing industries in the area will be relocated elsewhere.

Dr Gatt said Tecom was also bound to a Corporate Social Responsibility programme where it would contribute to education in the ICT field, drug rehabilitation, people with disabilities and cooperation with the Kalkara and Xghajra local councils.

He said the success of the project tied in with the need to cut down on bureaucracy. The practice is that businesses that want to open offices get all the necessary permits within 10 days. “That is why we will be setting up a permanent unit to ensure progress is made and deadlines are met,” said Dr Gatt.

“This is no joke, it’s a huge project and will focus Europe’s attention onto Malta. We want to regenerate, particularly in the south and this is part of the transformation of our economy,” said Dr Gatt.

He said the government would not continue to defend washed out industries such as the textile one. “We don’t want our workers to be on the same pay that workers in China or Tunisia have. This government tackles challenges head on and turns them into opportunities,” said the minister.

He also said that education needed to shift its attention towards producing more ICT graduates that will able to feed the demand for jobs once the project is up and running. He said that Malta would not even have to bother with marketing. “The developers obviously have every interest to see a full house and they are a hugely successful international model anyway so it will be up to them,” said Dr Gatt.

Asked by TMID whether the Mediterranean Film Studios would form part of the development, Dr Gatt said: “No. It will not be integrated, but with this type of development taking place, I sincerely hope that that the owners will do something to spruce it up.”

In the report released to the press, the ministry said the programme was in synergy with the national effort to place Malta on the global ICT map as a leader in the region.

The “SmartCity@Malta” will include a new full-fledged ICT and Media Smart City on the models developed by the same organisation in Dubai. This project will be accompanied by new state-of-the-art use of the environment of the site with the development of a hotel and other activities to help attract knowledge-based operations to the site. This is expected to create a cluster environment to service tenants in the site in a cost-effective and efficient manner.

The “SmartCity@Malta” will establish the south of Malta as the core service hub of the island, enhancing its environment and creating jobs in the region reducing the dependency on the manufacturing industries, said the ministry. It also highlighted that a significant component of the site will be developed as open space enhancing the environmental quality of the ICT and media business park, lodging, tourism and commercial areas of the site.

Dr Gatt said the government is satisfied that this investment will have benefits beyond those immediately obvious in terms of job-creation and foreign direct investment.

This project is bound to bring about a substantial boost to Malta’s construction, hospitality, maritime, services and retail activities, the ministry said.

“This development will also earn Malta a sharper image of partnership with private investment particularly, but not exclusively, in the knowledge sector.

“To ensure that the country maximises from the benefits of this new project the Ministry for Investment, Industry and Information Technology will be conducting a widespread consultation process with all stakeholders including Local Councils over the coming months.”

Minister Gatt said the next step in this project is for the Heads of Agreement to be concluded, following which a final stage of discussions – leading to a final agreement and commencement of work this year.