The government had sold off property in 2012 worth €2.4 million for just €525,000 in a “conspicuous” deal that suggested “an element of ministerial involvement”, the National Audit Office has found.

In a report tabled in parliament, the NAO found that the 2012 sale of a seafront property in St Julian's to Eighty Two Co Ltd had seen government departments fail to safeguard taxpayers’ interests and had not upheld the principles of transparency and good governance.

"When one considers that the property was transferred for €525,000 against the NAO's valuation of €2,400,000, the value for money was certainly not ascertained,” the report reads.

The report, however, finds that there was no evidence of political pressure exerted by then minister Jason Azzopardi, but raises suspicions over his potential involvement in the decision to go ahead with the sale of the property. 

The matter was referred to the NAO by the government members of the Public Accounts Committee back in 2015.

The case revolves around a property at 83, Spinola Road, which has a long and confusing history of ownership dating back to the 1970s.

In 2010, a tender was issued for the sale of the land with no minimum acceptable offer, after it was ascertained that the property, in fact, belonged to the government and had previously been illegally occupied.

Back then the site had been valued by the Government Property Division at €950,000.

The NAO itself valued the site at €1.5million or at €2.4million if the existing structure was included.

Sale of property left a lot to be desired

“The NAO noted various shortcomings in the process leading to the disposal of the site,” the report reads.

The responsibility for this, the NAO found, rested to varying degrees with the GPD officials involved, the architects engaged, and then minister Jason Azzopardi.

The minister’s involvement in the decision to go for the sale, rather to release the property on emphyteusis, “remained unclear”, as did that of his permanent secretary and the head of his secretariat.

This, the NAO said, was due to a lack of documentation retained on the matter, coupled with the fact that the decision followed a meeting for which the minister was present.

“Although the minister maintained that the GPD failed to clearly specify the implications on government revenue of an outright sale… the NAO has reservations,” the report adds.

The NAO points out that even if this were the case, Dr Azzopardi should have been aware of this “critically important fact”. 

The report also says the Commissioner of Land played a critical role in the sale after he provided partial information that misled the tender committee, several ministers, and the arbitration committee.

The report also points out that the Commissioner of Land’s failure to present all the facts of the case when referring the matter to the GPD tender committee had misled all subsequent decisions in the process, including the ministerial endorsement.

Dr Azzopardi’s ultimate approval of the decision to sell the property, however, was described as “injudicious”. 

The NAO also slammed the “conspicuous gaps” in documentation at critical stages of the process, which made it impossible for the NAO to determine the facts and responsibility of different parties.

As a result, the NAO said it had relied heavily on testimony which it said had resulted in conflicting accounts.

There was also a “total lack” of transparency in the process that led to changes in the site's footprint. These had seen parts of the coast included in the sale.

The NAO said it was unable to establish who had ultimately authorised the assimilation of foreshore into the site.

In a reaction, the Nationalist Party said the report had confirmed there was no ministerial interference in the process. 

The entire process was influenced by a notarial mistake dating back to 1975, and the report states that politicians were not given the necessary details, the statement signed by Jason Azzopardi said. 

On the other hand, the Labour Party condemned Dr Azzopardi saying that the NAO report had confirmed that the outright sale happened following a meeting with the then minister and his head of secretariat.