Business in 2015MEDIA ROOM
Companies will be waiting to see how many long-awaited projects get kick started in 2015, especially the ones that generate activity across the different sectors of the industry.
Lower electricity tariffs for businesses will save around €50 million, but it hasn’t yet been understood how these savings will be put to good use. They could be re-invested into expansion plans or into more efficient operations, used to reduce product prices and make the entity more competitive, or merely absorbed as extra profit. The impact will be largest in energy-hungry manufacturing, where competitiveness is the key.
Phoenicia Energy Holdings will have to decide whether it will take up the option to go into a second phase in Area 4 in January. This will be in line with its concession agreement – and drill a second well, after the unsuccessful deepwater Ħagar Qim was abandoned last summer. Majority shareholder Genel has yet to give any official indication of its objectives. However, the survey of Area 3 should be completed.
Malta could see rig stops well before the end of the year. The statement of the chosen bidder for the vast Marsa Shipbuilding site is imminent and the creation of a hub for oil and gas will stimulate a number of associated supply streams.
Moreover, one is still hoping that the 45-hectare White Rocks site will not live up to its white elephant reputation. Any updates regarding this matter were last heard on October 24, which was the closing date for submissions by the 17 investors who expressed interest in the project. The project would create considerable activity with a real estate, as well as upmarket hotels.
The Manoel Island project will surely win the prize for the most long-awaited project- the development brief of which goes back some good twenty years. Midi, the concession-holders, has been looking for a strategic investor to get this project going.
We are still in the dark with regards to whether the final product will be amended to appeal to very high net worth individuals – such as those being lured to Malta by the citizenship scheme – who currently have very few luxury detached properties to choose from.
The Metropolis project could start to take shape, after delays due to lack of permits and finance. Last November the Mepa board gave the green light to the €120 million project. As luck would have the project has remained a hole in the ground but it gave new life to the area around Testaferrata Street in Gzira.
The latter will not be the only high-rise project to tower over nearby buildings. Mepa’s policy, issued last spring, has already seen the Piazzetta in Sliema given approval but there are several other sites that qualified, which will unquestionably create controversy. It remains to be seen whether the business model for these sites is still valid, after so many years.
Since Mepa revised its height policy for hotels, there has been a flurry of applications for hotels to add storeys, however some also applied for demolition permits, and permits to rebuild. One of the most anticipated is the Corinthia St George’s Bay, which is set to establish a new standard for hotels in Malta. All of St George’s Bay could soon be unrecognisable, with development planned around most of its perimeter. On the other hand Radisson’s redevelopment plans were downgraded to a mere refurbishment.
Since the submission deadline in October for the design, construction and operation of a cruise terminal and yacht marina in Gozo nothing has yet been heard. Unfortunately only one proposal was presented. The negotiations were meant to be concluded by mid-December
Aside from this project, there have been very little plans for Gozo for 2015. Should the Xlendi buoy be re-laid to start catering for small cruise ships, and should the airstrip be redesigned for the use of light aircraft?
Projects like the ones mentioned above generate investment and add value which will grow the economy much more effectively than domestic consumption allows. But they would also contribute towards a general feel-good factor which spurs even further investment and in turn further growth. Nonetheless, one must take into consideration whether all projects should take off at the same time.