A motion changing the use of a tract of land belonging to the firm behind the Fortina Hotel from solely tourism to mixed use was approved in a fiery final parliamentary session before the summer recess.
The motion was tabled in Parliament by Parliamentary Secretary for Planning and Property Market Chris Agius in the name of Infrastructure, Transport and Capital Projects Minister Ian Borg, and was seconded by Government whip Byron Camilleri, on Wednesday.
The motion was approved with the government’s side outnumbering the Opposition, who all voted against it.
Three portions of land at the site were originally sold to Fortel Services Ltd – the owners of the Fortina Hotel and, by extension, the rest of the land in question – in 1991, 1996, and 2000 on the condition that it would only be used for tourism purposes.
Through this motion though, the owners are now allowed to use part of the new building as offices, apartments and shops, meaning that the purpose is now “mixed use”.
The motion reads that three government architects had concluded that Fortel must pay €8,100,000 to the government for the change of use.
Fortel themselves, the motion reads, had engaged worldwide audit firm Deloitte to reach a valuation for the change of use, a valuation which was concluded to be €2,721,506 – substantially less than the government’s valuation.
Despite this though, the motion reads, Fortel had agreed to pay the government’s valuation. The deal would see Fortel pay €1 million up front and €7.1 million after 10 years interest-free, when the project is completed for the change of use.
The company has insisted that approximately 85% of the site will be taken up by a newly-refurbished five-star hotel and facilities associated to it and the tourism sector.
The Opposition had already indicated that they would be voting against the motion after MPs Beppe Fenech Adami and Ryan Callus said in a National Audit Office Accounts Committee last week that the Opposition does not agree with the government’s valuation of the property.
The MPs added that the Opposition has reservations on the conditions the government reached with the Zammit Tabona family, which owns the site on which the Fortina Hotel was built.
The motion comes two weeks after a 64-year extension to Dragonara Gaming’s lease on a tract of land which holds Dragonara Casino was approved unanimously by Parliament.
Opening proceedings, Chris Agius specified that the land in question is private property owned by Fortina Developments or Fortel.
“We are here not to sell a piece of land, but to remove certain conditions so that they can make strong investment of €55 million”, Agius said before noting that the site already has approval from the Planning Authority for the project.
He noted that the method to evaluate the value of the removal of the concession was worked out as per the valuation standards of the Chamber of Architects of 2013 and were “serious and transparent”.
Agius attacked previous such deals which happened in the time when the PN was in government, noting cases such as that of Lowenbrau and that of 83, Spinola Road wherein the government got €35 for a property which should have been valued at €2.4 million.
He said that when discussing such contracts one must keep the common good in mind which will be created in the tourism sector, the property sector and in this case the financial sector.
In a particularly passionate and hard-hitting speech, PD’s Godfrey Farrugia decried the deal saying that parliament has lost its loyalty to the country. He criticised the fact that the payment was spaced out over ten years, saying that this is not a luxury afforded to the average Maltese citizen, before also suggesting that the deal had been agreed upon some three years ago and that this was simply a rubber-stamping exercise.
PN Deputy Leader Robert Arrigo then stoked controversy by declaring that he had a connection with the project as his sister is married into the family which owns Fortina, but that he would be voting against it anyway.
This was an assertion which attracted the ire of the government, with government MP Alex Muscat noting, quite cryptically, that Arrigo should explain the full picture rather than trying to tug at people’s heartstrings, an assertion which was later vigorously repeated by Minister Ian Borg in his winding-up speech, wherein Opposition Leader Adrian Delia demanded that he retract the statement and Arrigo demanding a ruling from the Speaker, having denied that he actually admitted having a conflict of interest.
Arrigo decried the value that is being demanded from Fortina, saying that everybody within the industry is seeing this as a “gift” and “state aid” and that this removes the principal of a level playing field.
Alex Muscat meanwhile also said, conversely, that this deal is the highest that parliament is requesting from a private entity when the price is calculated at a per-square-metre basis, before noting that it had taken the government two years from start to finish to draft a suitable contract up, while it had taken the PN in government only two days to draft up a contract in the Lowenbrau case in 2012, a point which was further expanded upon by fellow parliamentary secretary Silvio Parnis.
PN MP Ryan Callus meanwhile, who holds a position at the Lands Authority, called the deal “one of the biggest scandals of this legislature” and delved into what he called discrepancies and “dirt” with regards to the deal.
He said that someone within the Lands Authority had intervened to lower the valuation of the removal of the concession from €12 million, as was the result of the first valuation process, to a lower figure, which ended up being that agreed upon €8.1 million, noting that it is clear that “something stinks”.
He also noted that the valuation does not take into consideration as much of the site as it should, noting that there were other parts of the site that should have been included in the valuation process which would have no doubt affected the valuation.
It was a speech which roused opposition from the government’s side of the bench, with Labour backbencher Robert Abela decrying Callus’ 25 minute speech as a mud-throwing exercise and plainly false.
Opposition Leader Adrian Delia also waded into the debate, questioning the deal that the government had reached with Fortina.
“From what we understand and from the logic of today’s market, it is clear that this price is not just a little bit less than what it should be – it is a lot less”, Delia said.
He also decried that ten year period without interest that Fortina has to pay the sum to the government, calling the government “a bank for the speculator” and saying that it does not give the same such opportunities to the average citizen.
He frame his speech by then giving context, mentioning the Corinthia deal which had been withdrawn from discussion for a re-write and the deal for the privatisation of the Marsa Race Track and the Mtarfa Military Hospital to be changed into an international school.
He said that the government had given the Opposition the contract in this case mere hours before the debate, purposely so that they have no time to scrutinise it, while noting that the government has the obligation to get the best for Malta and Gozo, but that in all of the aforementioned cases, the government’s interests had been to let big private speculators dictate things themselves and do as they please.
Winding up the debate, a fiery Ian Borg raised the spectre of the Lowenbrau case, saying that those who “play the role of paladin of rule of law did not appear today”, ostensibly referring to former lands parliamentary secretary Jason Azzopardi, who did not make any interventions within the debate.
He decried Callus’ speech, questioning why he had only brought such points up when the cameras were rolling in parliament and not at an internal level within the Lands Authority where he had the opportunity to do so, before also repeating Alex Muscat’s assertions on Arrigo’s statement about his connection to the project.
He said that it was clear from the speeches from the Opposition’s side that they had not even read the contract, noting that this is a negotiation on the removal of condition on a “small part” of private land, before adding that what is clear is that no auditor general will ever write that there has been political intervention, as had happened in the past.
Getting a word in edgeways before he was cut off by Speaker Anglu Farrugia for going over the time limit, Borg said that the price agreed upon was a just one for the Maltese people.