How 45-year lease was turned into 99-year emphyteusis

The land on which the Marsa power station stood was in 2012 leased to a special purpose vehicle, Vault Finance, so that it could use the land as a hypothec for banking finance.

On its part Vault Finance  leased the land to Enemalta  for 45 years against an annual rent of €37,200.

In 2014, Enemalta was changed from a government corporation into a public limited company when Shanghai Electric Power became a 33% shareholder of the state utility company.

In the run-up to the incorporation of the plc, Vault Finance released the land back to the Lands Department so that it could be transferred to Enemalta plc, this time on a lease of 99 years for an annual payment of €65,000.

Unlike in 2012 when the land was first leased to Enemalta, the land can now be granted to third parties without the need of a public tender and a parliamentary resolution. This is because Enemalta plc has been exempted from laws regulating the transfer and disposal of public land.

In August 2014, before granting Enemalta plc the 99-year emphyteusis, the government took back the land by paying €2.4 million to Vault Finance Ltd – a special purpose vehicle created by the previous administration in 2012 as part of the restructuring process to address Enemalta’s debts. The amount was deducted from a larger sum owed to the government by Vault Finance Ltd. 

On the same day Enemalta paid a one-time payment of €2.6 million to the government so that it could take the land under a title of emphyteusis for 99 years.

To get back the land before granting the same land on more favourable terms to Enemalta the government utilised a clause in the 2012 agreement, which enabled the government to purchase the “temporary dominium utile” of the Marsa power station land at any time before 2046.

The site of the Marsa power station and its surrounding lands, measuring in total just over 67,000 square metres, was granted to Enemalta for a 99-year period.

Replying to MaltaToday earlier this month Enemalta said the conditions of the acquisition, including the price, were pre-established in the 2012 agreement with Vault Finance before Enemalta was turned into a plc.

But Enemalta failed to point out that the lease had been extended from 45 to 99 years.

When the original deed was signed in 2012, Enemalta was still state-owned and was not exempted from laws regulating the disposal of government-owned land which came into effect in August 2014.  

Enemalta will no longer need the land in Marsa after the power station is dismantled and decommissioned, which land also includes maritime infrastructure presently administrated by Transport Malta.

Legal Notice 302, of 27 August 2014, specifically refers to the deeds signed two days earlier on 25 August which included the lease for the land occupied by the Marsa power station. 

The legal notice removed all “restrictive conditions which limit the use or the transfer of the land included in the public deeds” which had been imposed by the government on Enemalta by virtue of the application of the Disposal of Government Land Act.

The public deed through which the government reclaimed the land from Vault Finance was published by the PN yesterday, while the deed granting the land to Enemalta for 99 years was already published by MaltaToday last Sunday. MaltaToday has revealed that the land at Marsa has already been identified for future commercial development. MaltaToday had requested the deed two weeks ago, but the request was not acceded to by either Enemalta or the Government Property Department, and then only released through the office of the parliamentary secretariat for lands.