12 - 18 April 2001

MDC urgently needs more space

by David Kelleher

The Malta Development Corporation urgently requires more space to be able to accommodate foreign companies who want to invest in Malta but require factory space to set up their business.
Speaking to The Malta Business Weekly, the chairman of the MDC, Lawrence Zammit, said the corporation had a very long list of foreign companies that were requesting factory space but this was not available.
“We need the factory area desperately to accommodate foreign requests, however this is not possible,” he said.
The main problem facing the MDC is the fact that a number of factories are being used in breach of the owners’ letter of intent. Instead of being used as factories they are used as warehouses while production is done somewhere else.
“This is a situation that cannot continue. I have already spoken in public about this and the MDC is going to take all the action possible to evict those who are in breach of their agreement,” Mr Zammit said.
Companies making use of MDC factory space are given preferential rates which serve as an incentive to local and foreign companies to invest in industry. However, a group of around 15 companies have been abusing of their “preferred” position.
“We are doing our best to evict these tenants however it is not always possible. There are many legal technicalities that require time to solve,” Mr Zammit said, adding “but I must make it very clear that the Corporation is actively doing something about the matter. In fact, we issued eviction orders two weeks ago.”
Although the MDC has been quick to take action, there are fears that cases could take months, if not years, to be cleared by the courts, making it nearly impossible for the Corporation to evict the tenants.
Sources told The Malta Business Weekly that a number of bona fide companies could also find themselves without factory space because the time-frame given to them to set up shop has nearly expired.
“Some companies that have expressed an interest in opening a factory are facing problems in raising finance and this is making it very difficult for them to keep to strict deadlines set by the MDC,” the sources said.
Local investment in the manufacturing industry is set to grow even further thanks to the introduction of the Business Promotion Act. The Act goes beyond simply offering attractive incentives to foreign companies but targets key sectors and local companies. According to the Minister for Economic Services, private investment in the local manufacturing sector has nearly doubled to Lm75m last year from Lm35m in 1999. This increase is also creating an extra demand on the MDC.
However, the bulk of all investment approved by the Corporation came from abroad with 53 per cent of MDC projects resulting from foreign direct investment.