SME Chamber

Bank Guarantees of Encroachment Permits

 After GRTU and the other constituted bodies made pressure on the banks to be lenient with companies that are presently going through hard times as the recession overseas is being felt on our shores and the banks to our satisfaction started with relieving hotel owners on loan burdens, Government is going straight ahead in the opposite direction.

Today are not good tourist days for Malta and the many who depend on the tourism industry. One would therefore expect authorities to help these actors go through these difficult times and the times that are yet to come.

With this regard GRTU has written to Hon Janson Azzopardi, Parliamentary Secretary for Revenues and Land, saying that we have been informed by several members who are holders of encroachemnt permits issued by the Lands Department enabling them to keep tables and chairs outside their establishments that they have received a circular requesting them to submit a Bank Guarantee to the value of two hundred and fifty Euros (€250) per square metre of approved encroachment.

Such parties are already severely restricted by the conditions imposed upon them from time to time, which the GRTU is in favour of particularly in relation to the quality and uniformity of outdoor furniture as well as the prohibition of advertising on umbrellas and the prohibition from obstructing public passage ways.

However the aforementioned requirement being imposed is entirely prejudicial and contrary to the judicial procedures already established in Chapter 409 of the Laws of Malta in case of breaches of license conditions. The imposition of a Bank Guarantee which will be withdrawn unilaterally by the Malta Tourism Authority in the event of an alleged breach without the benefit of a fair trial before the competent forum is tantamount to a breach of the right of fair hearing afforded by Article 39 et seq of the Constitution of Malta.

Moreover this imposition is detrimental and discriminatory against the large percentage of permit holders who obey their license conditions impeccably and who are subsequently being forced to issue this additional financial burden.

In the light of the above the GRTU solicited the Parliamentary Secretary to take the necessary measures in order to withdraw forthwith the request for the provision of a Bank Guarantee in favour of the Malta Tourism Authority by holders of encroachemnt permits issued by the Lands Department.

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