9 - 15 August 2001

New beginnings

Tony Cassar, chairman of Cassar Group, a member of the consortium Port Cottonera Limited, talks to Blanche Gatt about the significance of the completion of the first phase of the project

Last week’s spectacular opening of the Casino di Venezia sounded the drumroll for the rest of the Cottonera project. A total of Lm4.6m went into the renovation and decoration of the magnificent Scamps Palace, which entailed four and a half months of swift, determined labour involving over 600 workers, as the Port Cottonera consortium rushed to meet their 1 August deadline as agreed with operators, Casino Di Venezia, and avoid the Lm400,000 penalty for late completion. Now that the project’s first phase is completed, the consortium’s focus naturally turns to the remainder of the site under its aegis – an area whose building site state will surround the new casino for the next two years at least.
I went to speak to Tony Cassar, chairman of the Cassar Group of Companies, whose subsidiary, Cassar Marine Holdings Ltd, was formed specifically to join the consortium of entrepreneurs who make up the Port Cottonera Limited, and participate in the project to dev-elop the Cottonera Waterfont. The attraction for the Cassar Group was the fact that part of the Cottonera Waterfront development project included a marina, and, as ship repairers and servicers, this matched their line of business perfectly. As things turned out, Port Cottonera Limited was allocated the land base, while the sea base went to the second consortium.
“Originally,” explained Tony, “government gave us the sea-based part of the project, which we had become interested in because of the marina that was part of the project. However, the other consortium, that had been given the land base, said they would have preferred to get the marina, and we swopped there and then, in a matter of five minutes.”
The Port Cottonera Limited section of the project includes a number of historical buildings, one of which was Scamps Palace, up to four years ago a sad, disused shell that provided haven for illegal squatters and drug users who scattered their sordid detritus around the building, desecrated the walls with obscene graffiti and carried away any bits of the construction they could prise loose. Now, barely four and a half months later it is unrecognisable, restored to a glorious monument, resplendent in the sumptuous dècor of a Casino di Venezia.
“The Casino was the first phase
of the project,” said Tony. “And probably the

most difficult part. It is not easy to set up a casino, the Gaming Board will not accept just anybody to run it, and though government was committed to granting a licence to operate a casino, there were some operators who were not accepted. Eventually we were told that the Casino di Venezia was interested in investing in Malta, and, as we had always said the Cottonera should be a little Venice, we started negotiations with them.”
Casino di Venezia is owned by the Municipio di Venezia, the regional government body in Venice, and early on in the negotiations Port Cottonera Limited learned that this Council had allocated Lm2m towards the investment. ‘The fact that this was a regional government, or parastatal company we were dealing with,” said Tony, “gives much better guarantees, and the fact that this investor is a foreign government-owned body was not a concern to us.”
The newly-opened Casino di Venezia has no interest in competing for local business with the existing Maltese Casinos, Tony tells me. “Casino di Venezia focus on the junket market. This means that groups of gamblers are invited to a casino for three or four days. The casino pays for their flights and accommodation in five-star hotels. The guests are asked to deposit the amount of money they are going to play before they actually arrive in Malta, and there is a minimum amount they can deposit, which I think is around Lm2,000 or higher. For the gamblers there is a bonus in that the local government will only charge 16 per cent on junket winnings, whereas normally winnings are taxed at 36 per cent. This is done purposely to attract the big gamblers – if they were to rely only on the local market it would not be enough to sustain the Casino di Venezia’s investment.”
Junket gamblers come by invitation, and are hosted at the Casino’s expense. “Casino di Venezia has already committed itself with two hotels, the Cornithia Group and the Phoenicia, in Malta for a guaranteed number of rooms per week, both in winter and summer,” said Tony.
The location of the Casino, though itself a magnificent building, is in the centre of one of Malta’s most depressed and run-down areas, enjoying the dubious honour of having the highest percentage of unemployed people in Malta. As the casino, which for the next few years will remain the only five-star facility in the neighbourhood, with building work being carried out on either side of it, enters its second week of operation, are the investors worried about the implications of its location?
“When we started discussions with Casino di Venezia,” replied Tony, “their first demand was that we open by 1 August, and that it would be in full swing by 15 August. We explained that the hotel was not built yet, but this was not considered a problem. Besides these junket clients don’t walk around the area, they go straight into the casino – and once inside, the gamblers are not going to notice the building work going on around them.”
So perhaps hard-core gamblers will be drowning out the noise and dust, but the Casino is also aiming to attract social events, so how is both the location and the construction going to affect this side of the business?
“At this stage it’s a slight problem,” Tony admitted. “But within two years, when the marina takes off and the area is surrounded by luxury yachts and apartments, and the hotel is also ready, it will be a totally different scene. Besides, it’s important to remember that while Maltese consider it a rundown area it is very popular with foreigners, especially Germans, Swiss and Italians.”
The Casino will employ around 140 people when it reaches its full complement in about six months, but few were recruited from the area. “There are some from the three cities,” added Tony, “but the casino needed people who were fluent in English and Italian to work as croupiers. However, once the hotel and the marina are operational there will be much more chance of employment for people from the depressed areas.”
Some entrepreneurial minded locals have managed to land positions with the casino. The Ghaqda Barklori noticed an advertisement asking for ferry services from Sliema to the casino, obtained a vessel and organised themselves to run the ferry service for the casino.
The hotel is next on the Consortium’s agenda. “We are in talks with a foreign hotel chain that we hope will be the operator, and if we sign within the next three weeks as we hope to, it should be completed within 20 months,” said Tony. “We are ready to grant the tenders as soon as we sign, but I cannot reveal who the hotel chain is until we have signed with them.”
The rest of the project will include retail and catering outlets, as well as office buildings and
services. The Macina, across the harbour, forms part of the project, but the consortium have not yet decided what to do with it. “People have suggested a language school to us,” said Tony, “but we have not decided yet.” In the meantime, the other consortium, the Cottonera Waterfront, has already started selling its apartments on plan. “I have heard they have already sold 30 apartments, mainly to foreigners. So that shows that the area is not going to put people off. In fact, in the meantime, we have also been trying to find other properties to invest in, and prices have doubled in recent months.”
The consortium is prepared to wait awhile before recouping their investment. “We put Lm1.6m into the casino, and we are not sure when we’ll see our money back,” said Tony, “but I expect this to happen within about five years after the entire project is ready. In the meantime, we shall be investing a lot more than we already have – the hotel alone is going to cost us Lm4.5m.”
“I have believed in this project from the very beginning,” concluded Tony, “and I never had any doubt that it would be a success. I think that thanks to this project Cottonera will change back to the elegant place it was until the War, and if we continue with our plans, this long awaited transformation will happen fast.”