Minister defends €60 million ITS land valuation as ‘fair pre-construction rate’

Minister without a portfolio Konrad Mizzi did his utmost to fend off criticism of both the ITS land transfer, as well as his involvement in the Panama Papers scandal tonight in parliament.

Replying to questions put to him by members of the opposition after a ministerial statement on the ITS land transfer, Mizzi said that he noted that many of the questions put to him were not about the ministerial statement he had just delivered, adding that this showed that the contract in question was in fact “a very strong one.”

On criticism that the €60 million valuation of the land was significantly lower than the €200 million that was mentioned in the Paceville masterplan, Mizzi said that the rate was a “fair pre-construction rate.”

“The masterplan was saying that if you have a finished apartment and the government considers expropriating it, he would have to pay the market price. Here we are talking about undeveloped land,” said Mizzi.

He reiterated the valuation had been carried out by Deloitte – on of the “Big four” auditing firms – using an internationally accepted method, adding that the method used will serve as a “benchmark for future projects.”

Comparing the valuation of the ITS land for the project to other projects by previous legislatures, Mizzi said that “if one were to compare the valuation on the basis of the footprint, the price is greater than €2300 per square metre (sqm),” far greater than the €126.07 per sqm paid for Hal Ferh and the €345 per sqm for Manoel Island and Tigne.

“The most interesting ground rate is the one paid for Smart City. The figure is of about €0.40, what a difference from the independent evaluation we have today,” he said.

Mizzi stressed that an economic impact assessment of the project had been prepared by the bidder and that meeting were held with all stakeholders involved in other projects in the area as well as with the Malta Developers Association.

Moreover, he said that the Maltese economy would be benefiting from an injection of €800 million in the first ten years of the project, with the €490 million entering the government’s coffers. He added that the project would also be creating a many “good-quality jobs.”

Opposition leader Simon Busuttil on his part started by saying that it was disgraceful that Mizzi was giving a ministerial statement in Parliament following his involvement in the Panama Papers scandal and rejected the government’s assertion that it will be making €60 million from the land transfer. “The government will be making €5 million immediately and €10 million over a period of time,” said Busuttil, who asked for a clarification of “where the €60 million would be coming from.”

He questioned why the government had not secured the validity of the transfer by obtaining a parliamentary resolution. Moreover, he criticised the government for allowing a development to take place that went against the local plan for the area. “Is it the case that an agreement was made with an individual before the local plan was changed,” asked Busuttil.

On her part, Marlene Farrugia said that Mizzi had given a lot of examples of mistakes made by the previous administration and stressed that this was the reason that the people had decided to remove the Nationalist Party from power.

Like Busuttil, Farrugia also doubted whether the government would be receiving €60 million from the deal and insisted that in fact, it will be making a mere €5 million, adding that it was unacceptable for the government to allow €10 million to be paid, without interest, over a period of years.

“The government guarantees loans for the big fish and not for regular people,” said Farrugia, insisting that the deal was a “rip-off” for the country.  “A few months ago, the government sold the 500 sqm MIMCOL building, which has no view, for €3.2 million, and this beautiful piece of land was sold for a mere €5 million,” said added.