The parliamentary Public Accounts Committee this afternoon heard submissions by the Auditor-General as it continued to investigate the transfer of a Balluta property by the government in the last PN legislature when Jason Azzopardi was the minister responsible for land.
The hearing was held following a report by the National Audit Office which found irregularities in the transfer of land in Spinola Bay which had originally been acquired through the 1992 Church-State Agreement.
The case saw company 82 Limited acquire 83, Spinola Road through circumstances which the NAO report described as “injudicious.”
Labour MP Robert Abela described the procedure adopted by the then government in 2012 as “inexplicable,” saying the government chose to disregard a court order warranting the eviction of 82 Limited from the foreshore and the demolition of illegally constructed structures.
Instead, it assimilated the foreshore and the original property at 83, Spinola Road into a single site, for which it called for offers. The land, which the NAO report considered to have been worth €2.4 million, was at the time valued at €950,000.
The Auditor General told the committee that despite the conditions imposed by the government’s call for offers, the Lands Department decided to go ahead with an informal arbitration instead of one held under the auspices of the Malta Arbitration Centre.
Nationalist MP Claudio Grech observed that according to the NAO report, the minister may have been misled. Had he been asked why informal arbitration occurred?
The auditor said the director-general decided to go ahead with the informal arbitration. This arbitration saw the €950,000 asked for in the call for offers reduced to €525,000 with the assent of the same director general, as a middle position between the government’s initial asking price and the €192,225 offered by the company in question in their application.
The Auditor General also explained how the decision to go for an outright sale versus an emphyteusis meant that the government would ultimately receive only €35 of the reduced figure, with the remainder of the amount owed to the Church. Of the latter amount, €309,000 remained outstanding, with the last payment having been made in July 2014.
Dr Abela pointed out that the minister could easily have known that the process would only yield €35 towards the government coffers, as this was an automatic result of the process established with regards to property formerly owned by the Church. The minister was also mistaken in allowing the assimilation of the Government-owned foreshore and the Church-owned property, with virtually all the income from the sale of the assimilated land going to the Church.
The Auditor General’s Office concurred that there should have been separate tenders issued, and pointed out “astronomical” variances in valuations in all six of the cases that they are currently investigating, including the land at Spinola, a parallel case at Fekruna Bay, the site of the former Löwenbraü brewery, and the Gaffarena case in Valletta. There was also a serious lack of documentation across the board, and valuations from multiple architects had not always been sought.
There was also a serious lack of documentation across the board, and valuations from multiple architects had not always been sought.
Nationalist MP Beppe Fenech Adami asked whether the then minister had been properly informed about the details of the site.
The Auditor-General said there was no explicit evidence that he had been informed or that the government would only be getting €35 if the land was sold instead of being leased, but he could have worked out this figure based on the information given in the case file.