The highest price ever paid for public land concessions, Konrad Mizzi says on ITS site transfer

Minister Konrad Mizzi said yesterday that a new land valuation system used for the ITS site, which is being transferred to the db Group, left the government much better off than past land transfer deals, including Manoel Island and Fort Cambridge.

Speaking in Parliament on the St George’s Bay project, which will see a €300 million private investment, Dr Mizzi said Manoel Island had been given to the MIDI consortium at a price of €345 per square metre when the ITS site was being given away at a price of €2,300 per sqm.

The previous administration would have pocketed €95 million more on the Manoel Island and Tigne Point sites had it used this new valuation method.

Dr Mizzi said the Fort Cambridge site in Sliema had been given away for €55 million when it would have fetched €82 million using the new system.

The Penderville site in Paceville was valued at €24.7 million by a previous PN administration but, according to the new system the site is worth some €90 million.

The worst example, he said, was SmartCity, which had been given away at a ground rent of just 40 cents per square metre.

On the other hand the government will pocket €60 million from the ITS site land transfer – which includes some €4 million in taxes and stamp duty. The valuation was carried out by Deloitte and Touche, a company of international repute, using a modern system and real market values. “This is the highest price ever paid for public land concessions,” the minister said, adding that the new method will be used for future projects.

He insisted that the project would inject some €800 million into the economy in the first 10 years, through construction, new jobs and a ripple effect in other sectors. The government, he said, will pocket some €490 million – the figure includes the price negotiated with the developers and taxes. The project will not only create quality jobs but also regenerate the area.

Dr Mizzi also said that it would have cost the government some €6 million to build another ITS at SmartCity. Instead, it was seeking investment from the private sector and the new campus would be accompanied by a hotel, dormitories, administrative offices and all the necessary infrastructure. “It will not just be a campus for academic studies but a place where students can also obtain the necessary training and experience.”

The Opposition, which had earlier walked out of the chamber insisting it did not recognise a minister with a secret company in Panama, returned to the chamber and bombarded the minister with questions.

Opposition leader Simon Busuttil said allowing Dr Mizzi to speak about these issues was an insult to parliament and the public. “It casts a shadow on everything he does and says, including the contract he spoke about today, which is a shame.”

Dr Busuttil challenged the €60 million claim, saying that the government would only be pocketing €15 million. “From what we can see it seems that there will be an initial payment of €5 million, followed by several interest-free payments over a number of years. There will also be a period of five years during which ground rent will not be paid.”

He also asked why the government did not feel the need to transfer the land by parliamentary resolution and whether it would ignore the Local Plan for Paceville, which set limitations on the size of buildings.

The PN leader then shifted to the Panama Papers scandal, asking the minister where the €1 million he was supposed to deposit yearly in his secret account would have come from.

He also asked the Prime Minister to state who the third Panama company – Egrant – belonged to. “I can tell you that I do not have a secret company,” Dr Busuttil said.

At this point all PN MPs held up placards reading ‘I do not have a secret company in Panama.’

Several speakers then took the floor, including independent MP Marlene Farrugia, who described the deal as a rip-off.

Closing the debate, Konrad Mizzi noted that several of the Opposition’s questions were not directly related to the contract. He insisted that the €60m figure was real.

Dr Mizzi insisted that a parliamentary resolution was not necessary since the rules of a competitive tender were observed.

Replying to claims that the Paceville masterplan gave the land a higher value, Dr Mizzi accused the PN of misleading. The masterplan, he said, spoke of the value of built up land that could be expropriated, not land that needed to be developed from the foundations upwards. The valuation, he said, was based on the premise of a mixed-use development. He also insisted that the developers would have to observe foreshore laws like anyone else.

Residents are an important part of the location, he said, and there is a clear commitment by authorities and developers to ensure that community will gain from the development, not only the value of their property but also through the creation of new open spaces.

Dr Mizzi did not react to questions about his Panama company but said the Opposition leader was himself surrounded by people involved in dubious deals. One was director in a company investigated on money laundering and drug money.

Another was involved in a pension fund that is subject to a criminal investigation. The Opposition leader, Dr Mizzi said, was also defending people like Jason Azzopardi, who was involved in a land transfer deal on which the government lost millions.

"I can tell you that I do not have a secret company"