‘We have nothing to hide and nothing to fear’

Db Group’s City Centre project land price

In its first public announcement for two years or so, db Group – through its CEO Arthur Gauci – said yesterday that it “gladly welcomes” the European Commission’s recent statements on the project and submitted 10 facts about the contentious City Centre Project “to conclusively demonstrate that this EU criterion was completely fulfilled.”

Gauci said that the db Group had noted the position taken by EU Competition Commissioner Margrethe Vestager on the transfer of the public land in St Julian’s for the building of the City Centre project.

“The Group warmly welcomes the Commissioner’s confirmation that the Request for Proposals (RFP) procedure followed for the land transfer was in conformity with EU rules,” he said.

He also noted that the Commissioner had added: “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 market price.”

Welcoming the statement, Gauci provided 10 facts “to conclusively demonstrate that this EU criterion was completely fulfilled”:

For the first time in Maltese history, the market value of public land has been set by an auditing firm of global reputation, namely Deloitte.

Using the formula established by Deloitte, the db Group will be paying a total of €60 million for the land in question, the highest price ever paid per square metre for a comparable project in the last 20 years. This remains the case even when the increase in the price index is factored in.

Under oath in court on 7 May 2018, a Deloitte partner declared that they had met with various promoters of similar projects in St Julian’s “to understand exactly the market in the area”. Follow- ing these meetings, and keeping the requirements of the RFP in view, he reconfirmed under oath that €60 million was in fact the market value of the City Centre site.

The Deloitte partner also testified that, to support its work, the firm had engaged the architectural services of various architects, amongst them Prof. Alex Torpiano.

The public call for submissions for the project was in full conformity throughout with all applicable local and EU laws.

The db Group will be investing €300 million in the project.

This amount makes it the largest private investment by an individual in the history of Malta.

In total, the City Centre project will generate around €490 million of direct revenue to the government over a 10 year period.

The project includes the creation of an underground car park for 1,700 vehicles.

Once the project is completed, the contract obliges the db Group to create 1,500 jobs. If not, the Group will have to pay a penalty. This is apart from the work and jobs created during the construction phase.

Gauci added that the db Group “welcomes the Commission’s scrutiny as much as it has welcomed that of local institutions from the start. It is worth recalling that the Group had publicly embraced, and still does, the review of the land transfer by the National Audit Office. We have nothing to hide and nothing to fear.

“Finally, we take this opportunity to invite politicians and journalists to scrutinise and verify the above 10 facts. We are fully confident that none can be refuted.

“We also invite concrete financial comparisons with public land transfers in the past, present and, crucially, the future, using the same formula established by Deloitte. The government is already publicly committed to keep using. Comparisons with the Corinthia Group’s proposal for the site literally adjacent to ours and that for White Rocks should be particularly enlightening.

“Transparency, justice and the rule of law require no less.”