A report by the National Audit Office found that a restaurant at the Malta Life Sciences Park operated without a licence “for years”, carried out renovation works without getting a planning permission and also paid no rent.
Further, the report also states that the Malta Tourism Authority as well as Malta Enterprise knew that the restaurant had no permit to operate, despite being open for business.
The restaurant in question, Zenzero, was run by Cook & Co Ltd. It opened in January 2017 and continued to serve customers until COVID forced its doors shut in 2020. At the time of opening, it had secured a temporary three-month licence to operate, but never secured its fully fledged licence, as required by law, despite continuing to serve customers.
“While primary responsibility for this failure rests with Cook & Co Ltd, for the lease agreement stipulated that it was the tenant who was to ensure that operations were covered by the relevant licences, an element of concern emerges in that the MTA and Malta Enterprise were aware that the restaurant did not have the required licence yet was allowed to continue to operate for a three-year period regardless,” the Auditor General wrote in the report.
Notwithstanding this, the NAO acknowledged that Cook & Co found complications with the site from the get go, which underwent a ‘change of use’ from a childcare centre to a restaurant, and this gave rise to complications in subsequent efforts to regularise the site and obtain the required operating licence.
The convoluted issue stems from a separate ongoing dispute between Cook & Co Ltd and Malta Digital Hub Ltd (MDH), a Malta Enterprise offshoot that manages the Malta Life Sciences Park.
In 2015, the Malta Life Sciences Park issued a request for proposals for the provision of food and beverage services at the Malta Life Sciences Centre and the Malta Digital Hub Ltd.
A lease agreement was entered into between the MDH and Cook & Co. Ltd in May 2016. After several years of operation, Cook & Co. Ltd maintained that the request for proposals was fraudulent in that the premises were not as described, giving rise to operational difficulties.
It arose that Cook & Co never visited or viewed the property before taking on the lease agreement, while the NAO found that the request for proposals was “ambiguous in that, rather than procuring an F&B service, Malta Enterprise was leasing a site from which this service was to be provided”.
The NAO noted that the request for proposals lacked detailed plans for the site, which was considered relevant given that its use was changed from a childcare centre to a catering establishment, necessitating adaptations.
It also noted inconsistencies between the actual premises, the plans annexed to the request for proposals, and those submitted by Malta Enterprise in its planning application for the change of use. Visibility was curtailed since no site visit was held during bidding.
After reviewing proposals submitted, Cook & Co was selected due to its offer being the most economically advantageous, while the Auditor General further noted shortcomings during the selection process, “including gaps in documentation, the meeting held solely with Cook & Co. Ltd. during evaluation, and the notification of the successful outcome of its bid prior to the referral of the evaluation report for the endorsement of the Malta Enterprise Board of Directors.”
Ultimately, after taking on the lease, Cook & Co found that the site was in far worse condition than expected. Cook & Co argue that this alone rendered the contract fraudulent, since the conditions did not match what was stipulated. Here, again, the NAO lays blame on all sides, saying Malta Enterprise was dutybound to grand prospective bidders access to the site, while Cook & Co should not have accepted and signed terms without seeing the site first.
The saga continues after Cook & Co were found to have carried out works on the Zenzero premises without first securing a permit. The state it found the site also meant that the company was unable to start serving guests on 1st September 2016, as required by the agreement.
While the late start of the provision of services does not appear to be a bone of contention, the fact that works were carried out without a permit by Cook & Co meant that restaurant was unable to obtain a licence to operate from the MTA, further compounding issues.
Malta Enterprise also said that the company operating the restaurant failed to pay rent and other expenses owed. The total figure claimed by Malta Enterprise through MDH stands at €107,022, which includes €63,310 in Rent, €33,084 in Electricity and €6,031 for a Security Deposit.
MDH proceeded to file court action with the aim of evicting Cook & Co from the Zenzero premises in late 2020, and in turn, Cook & Co reported the MDH to the Rent Regulation Board over reported breaches in the terms of the lease agreement.
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