The wrong gift!

The Land Acquisition (Public Purposes) Ordinance (Chapter 88) provides that the President of Malta may declare any private land to be acquired by the state for a public purpose.

During the course of the past 10 years, it is estimated that the state reimbursed no less than Lm36 million to private property owners whose land was expropriated by the state. In the last days, Labour strategists have opted to describe one of these transactions in connection with a portion of private land in Safi within the development zone, incidentally belonging to a government minister, as a lucrative gift.

The land previously belonging to Ninu Zammit measures 187 square metres and falls within the current scheme boundary of Safi. According to the Land Acquisition Act, Mr Zammit is therefore entitled to a compensation based on a value which assumes that his land is a building site, since article 18 of the said law specifically states that land shall be deemed to be a building site if it falls within the limits of a building scheme.

Incidentally, before the law was amended, all sites situated not more than 91.5 metres of the adjoining built-up area were previously considered as building sites for the purposes of compensation. Article 27 of the same law also stipulates that the land value should correspond to the value as at the time when the President's declaration was served, that is February 22, 2007.

On a parallel note, if the land was not considered to be a building site in terms of the provisions of article 18, the land's potential for development is to be excluded for the purposes of assessing the value of compensation due to the original owners. The law has therefore been specifically designed to afford a clear interpretation in assessing the market value of expropriated land on the basis of the site location.

In other words, had the government not opted to expropriate the said land, this could have easily fetched in the open market no less than Lm105,000 on the date when the declaration was served. This value is based on market prices, which conservatively average at about Lm560 per square metre for plots of land where the current allowable height limitation is equivalent to three floors and an overlying penthouse.

Since the land previously belonging to Mr Zammit should have been assessed as a potential building site according to the open market in terms of article 18 of the Land Acquisition (Public Purposes) Act, the recipient was entitled to receive Lm105,000 rather than Lm67,000 in compensation, going by market prices as of February 22, 2007 (Lm 67,000 being the sum the state seems willing to pay). This infers that the value of the said plot of land has, in my professional opinion, been significantly undervalued.

Not only is there nothing in the law that deprives any private land owner (including politicians) whose land has been expropriated to receive compensation from the state if their land is expropriated for a public purpose but, in this case, the recipient, who happens to be a government minister, has received less than two thirds the real market value a potential seller would have unquestionably demanded should the land was available on the free market.

Mr Zammit received Lm38,000 below the market value he was entitled to in terms of the Land Acquisition Ordinance Act - certainly not the lucrative gift Labour strategists attempted to portray!

Mr Musumeci, an architect by profession, is Siggiewi mayor and a Nationalist candidate for the general election.

rmperiti@onvol.net