Dishing out public land

In 1997 together with a number of other activists, I went on hunger strike to protest against the way public land was dished at a ridiculous price to make way for Portomaso. We did not have a tree hugging motivation. Our motivation being misgivings on how public land was disposed. The hunger strike was stopped after the intervention of the ombudsman. Apart from concluding that the government “failed to use its negotiating powers to maximise the benefits to be derived from the deal,” the ombudsman declared that "in this case changes to the original conditions regulating the grant of land were so substantial, that in the public interest and in the interest of good administration, the government had a moral obligation to refer the proposed concessions for the scrutiny of Parliament". Following this, the government changed the law to ensure that public land to third parties should be discussed and ratified by parliament. Previously to this public land on the coast was dished out at dirt cheap prices to a number hotels to promote economic development. Yet the practice of dishing public land at nominal ground rent fees continued despite the obligation to report to parliament. One case in point was the Midi project-a conglomerate of Maltese capitalists which includes Polidano Group, BOV, Zarren Vassallo and Mizzi group among others. According to the emphyteutical deed, MIDI have to pay an annual ground rent of €1,118,100 (Lm480,000) until 31 March 2025. The rent will rise to €1,956,673 (Lm840,000) from 1 April 2025 until 31 March 2050, and again to €2,236,198 (Lm960,000) from 1 April 2050 onwards. Apart from the annual ground rent, the developers also have to pay a premium of €91,707,431 (Lm39,570,000) of which €32,145,353 had to be paid in kind (infrastructural and drainage costs). So far the developers paid €12,974,610 (Lm5,570,000) payable in instalments (up to the year 2006) without interest. A further €46,587,468 (Lm20,000,000) will be paid in instalments between 2010 up to 2023 without interest. Restoration works on the external fortifications of Fort Manoel were also set-off against a €1,164,686 (Lm500,000) casino concession fee for MIDI’s new casino in Manoel Island. The Smart City development followed the same pattern. The Ricasoli land – a vast industrial wasteland the size of 40 football grounds – was offered to Tecom Investments for a ground rent of Lm65,000 (€150,000) a year, increasing by 5% every five years. Instead of paying a premium on the land, the developers offered a number of shares to the Maltese government. Surely one could justify the low price paid for the land on the ground that the project is set to create 5600 jobs. But the project also included 119,000 square metres of floor-space (the size of 20 football grounds) for real estate and commercial development. So why wasn't a differential rate set for the real estate and the IT components of the project? One notable exception was Fort Cambridge project which was sold for a quite decent LM 23.3 million. This deal did not come without controversy. For the payment of this sum overshadowed the whole planning process and the initial decision to waive the EIA-a decision only withdrawn after the intervention of the EU commission. For how could MEPA not approve a project on land already sold to developers? This led to a tragic comedy of errors which culminated in MEPA's decision to allow 20 floors in the height of a 16 floor block. Finally we have the White Rocks project for which a conglomerate of foreign companies will build 300 apartments on public land for free in exchange of building sports facilities. As in the case of Smart City, the impression being given is that the national interest is being served as the community will be getting something in return: 5600 Jobs and IT development in the case of Smart City and sports facilities coupled with 800 jobs in the case of White Rocks. Unlike many other cases involving Maltese developers in the past the state will not be receiving peanuts simply to make way for speculation or hotels. Yet it is a legitimate answer to ask; What sum of money will be invested in the sports facilities? Has the land been valued and does the investment in sports facilities match its price? While at face value the investment in sports facilities is more than welcome, we have a right to know whether the developers are paying a fair price for a slice of Malta.