The letter of complaint sent to the European Commission over alleged illegal state aid in the sale of land in Ricasoli was not made by another jealous EU state, as was initially thought by the government, but by three ISPs that host various Malta Labour Party websites, a government source divulged to this newspaper yesterday.

The three companies concerned based their claims on the fact that Maltacom’s dominant position in the market would put them at a disadvantage. However, the government source pointed out that SmartCity has never applied for a telecommunications licence anywhere in the world throughout its history of operations.

Sources close to the IT and Investment Ministry told this newspaper that the Maltese permanent representation in Brussels received a letter asking for information on alleged unlawful state aid in relation to the SmartCity development.

The 28-page complaint letter sent to the European Commission contained some 13 annexes of some 100 plus pages. In fact, in parliament yesterday morning, Minister Austin Gatt revealed that the complainants to the EC were three Maltese companies which host the MLP.org.mt website, the online version of the Kulhadd newspaper, the Malta Labour Party Youth.org website and www.orizzont.com.mt.

The source told this newspaper that these companies are in fact Nextweb, Keyworld and Waldonet. Keyworld was recently bought out by Nextweb. The same source went on to indicate that Nextweb is owned by former MLP appointed Maltacom chairman Tony Meilaq.

Government sources said that the complaint was filed to the European Commission on 20 July this year and literally hit everyone like a bolt out of the blue. “It was done covertly and the complainants did not go public,” said the source. The complaint was not a simple one and was in fact put together by a Brussels based law firm.

The basis of the complaint was the price at which the land in Ricasoli was sold to Tecom for the development of SmartCity. The complainants reasoned that the sale has put them at a disadvantage because of Maltacom’s (now Go) dominant position in the market, citing the fact that Tecom owns 60 per cent of their shares. The source explained that the complaint basically claimed that the government should have sold the land for SmartCity at the same price that the land was sold for the development of Pender Place and the Crowne Plaza.

The source said: “Which is absurd, the latter two sites are prime real estate locations while the land in Ricasoli is in a state of total dilapidation. Moreover, the developers will set up all infrastructure and maintain it at their own expense.”

The government looked into the matter and at first thought that it could have been another member state which was jealous of the fact that Malta had attracted such huge investment. “We truly cannot understand what interest local companies have in doing this when virtually all the IT-related companies have come out publicly and said that they stand to benefit from SmartCity being set up in Malta.”

The government source continued: “A line has been crossed that should not have been crossed. This project is in the national interest.”

The government has already submitted its reply to the European Commission, basing its text on the issue of land value. The source also pointed out that if the development of SmartCity did not go ahead, the government would lose out on some Lm42 million in recurrent tax revenue while the country would lose some 5,600 jobs and a capital investment of Lm100 million, putting Malta firmly on the IT map.