What matters is whether government acted as a private seller, and if land was sold at market price

ITS site transfer to db Group

The European Commission has weighed in on the controversy surrounding the transfer of public land – the ITS site in St Julian’s – to the db Group, saying: “What ultimately matters is whether the public authority acted in its capacity as a private seller in concluding the transaction and that the land was sold to the buyer at a market price.”

The comment comes from European Commissioner Margrethe Vestager, in reply to a European Parliamentary Question by Ska Keller, the co-Chair of the Greens-EFA Group in the European Parliament, who requested the European Commission to look into whether the contentious sale of the ITS site in St Julian’s to the db Group has violated state aid rules and distorted competition.

The Commission, however, was unable to pronounce itself as to whether or not the transfer resulted in the grant of state aid by the Maltese government to San Ġorġ Property Ltd within the meaning of Article 107 of the Treaty on the Functioning of the European Union.

This was because the land transfer had not been the subject of a complaint notified to the Commission, and because: “As a general principle, the mere fact that a public tender process is not carried out is, in itself, insufficient to conclude that a transfer such as this en- tails the grant of state aid.”

Keller contended that the transfer of public land to a private real estate company may have broken EU rules because a formal tender had not been issued, as per EU procurement regulations, but only a request for proposals.

In her parliamentary question, Keller noted that, back in February 2017, the Maltese government had transferred 24,000 square metres of public land at the prime seafront location St George’s Bay, St Julian’s, to the company db San Ġorġ Property Ltd, for €15 million, payable over a period of seven years and that no interest will be charged.

She also brought up the hack- neyed, and arguably incorrect, argument that “the market value of the site in question is quoted in the Government’s own master plan as being €8,500 per square metre, ie €204 million for the land in question, as opposed to the price of €15 million negotiated by the Maltese government.”

Arnold Cassola petitions European Commission

Yesterday, after this week’s reply from the Commission, former Maltese Green Party chairman Arnold Cassola launched a petition to the European Commission, and is encouraging others to follow suit.

His petition states that, along with the price and size details provided by Keller, “Commissioner Vestager confirmed that if state land is sold to private investors at a price that is less than the market price, this constitutes state aid. This is exactly what happened in this case, not only depriving the Maltese state coffers of around €120 to €150 million but also causing environmental and social damage that will have a direct and profound impact on the quality of life of around eight per cent of the whole Maltese population, ie around 30,000 inhabitants of the towns of Pembroke, Swieqi and St Julian’s.

“I am asking you to take action to invalidate the sale of this land to San Ġorġ Property Ltd (DB-Group).”