Vassallo Builders have strongly criticised a report by the Auditor-General where it was stated that the former Lowenbrau site in Qormi was transferred by the (former) government for €706,000 when its value was €7,838,515.

In the report, tabled in parliament two days ago, the auditor wrote that: "when one considers the freehold value at which the land was disposed of by the government, that is €706,000, with the €7,838,515 established by the National Audit Office, the discrepancy is obscene, beyond any limit of acceptability and fairness."

The auditor had as a result rapped then minister Jason Azzopardi.

But in a letter to the audit office today, Vassallo Builders said this reasoning was "completely flawed and evidences a lack of knowledge of basic principles."

In 2012, when the deed was done, the land was not freehold property of the government, it said. Hence, the NAO verification of the value of the land in Qormi was totally irrelevant.

The NAO report itself showed that consequent to the emphyteutical concession made by the government in November 1990, the only title which the government had was directum dominiu perpetuum. This meant that the only entitlement the government was to receive from the emphyteuta was the payment of the annual ground rent as stipulated in the deed.

The emphyteuta was entitled to redeem the ground-rent in the manner laid down in the law. This was €465,875.

"The sum of €7,838,515 established by the National Audit Office as the present freehold value of the land is irrelevant and blatantly misleading. By the audit office's reasoning, an emphyteutical condition is being equated to the freehold title to the land and attributed an unrealistic value in excess of €7 million," Vassallo Builders said.

The group also pointed out that it was not the one which actually asked to redeem the groundrent. The request was made by LBM Breweries Ltd. 

(Vassallo Builders later took over the land and developed it into a retail complex.)