The decision to dispose of land in Balluta Bay by outright sale instead of by revisable perpetual emphyteusis had been taken with the intention of expediently closing the case, which had dragged on for decades, the Public Accounts Committee heard this afternoon.

The  property had been transferred by the government in the last PN legislature when Jason Azzopardi was the minister responsible for land.

The committee is hearing the case following a report by the National Audit Office which found irregularities in the transfer of 83, Spinola Road to 82 Limited through circumstances which the NAO report described as “injudicious.”

The land which originally been acquired through the 1992 Church-State Agreement.

Former Government Property Division Iman Schembri told the committee that throughout the process, which was concluded in 2012, he had felt pressured by the applicant, who at one point blamed him for a medical intervention which he had undergone.

He recalled feeling frustration at the fact that, every time a course of action was agreed upon with the client’s attorney, the latter would present fresh objections after a couple of days.

“The straw that broke the camel’s back” was the attorney’s insistence that the amount of €525,000 agreed upon as a cash price be made payable over 10 years, he said, adding that the ministry had eventually settled upon installments over five years.

In reaction to this proposal, Mr Schembri recalled adding a minute to the case file along the lines of ‘despicable’. But going through the file replica provided to the committee, he could not find this minute.

The NAO report had noted that the property, worth €2.4 million, was transferred for €525,000, and the decision to go for an outright sale versus an emphyteusis meant that the government would ultimately receive only €35, with the remainder being owed to the Church. To date, €309,000 remain outstanding.

Mr Schembri said he had offered the minister two options for the disposal of the land - outright sale or a perpetual emphyteusis which would be revised after 15 years according to inflation, the option which he recommended.

And since the division did not have a board at the time, its director general reporting directly to the minister or to a member of his secretariat, the minister could not have been unaware of the details of the case.

This, Mr Schembri said, could be clearly seen from the case minutes. He noted that the head of the secretariat, Lino Mintoff, had been present for almost every meeting relating to the case.

Ultimately, the minister had decided to authorise an outright sale for two reasons - one because issuing a permanent emphyteusis would have required a fresh tender, as the tender issued for the plot was a tender for sale, a prospect which was met with strong objections by the applicant’s attorney, the other because the issuance of a perpetual emphyteusis which would be revised after 15 years had met with strong objections from the applicant.

Mr Schembri pointed out that the case was complicated by the fact that the applicant had originally purchased the land in good faith, unaware that the emphyteusis had expired.

Acting upon this mistaken information, the company had already proceeded to build a shell upon the purchased land.

Mr Schembri questioned the NAO figure of €2.4 million, as the sale did not include the entire footprint of the property or its airspace. However, MP Robert Abela pointed out that the division had used private architects for its valuations, rather than turn to the Malta Arbitration Centre as stipulated in the original tender.

Mr Schembri observed that, although the figure of €525,000 could not be changed, the apportionment of that amount between the Joint Office and the Curia could still be modified.

Answering a question by Opposition MP Beppe Fenech Adami, he said he did not know whether steps had been taken in this direction, as he had ceased to be director general of the division in November 2013, upon the expiry of his contract.

Mr Schembri’s deposition was followed by that of Gejtanu Schembri, who was a draughtsman at the division at the time and who was responsible for the drawing up of a site plan for the tender.

The latter testified that he had been instructed to prepare the tender’s site plan on the basis of a plan provided by the tendering company’s own architect, and that no on-site inspection was conducted, according to standard procedures before inspections were introduced four years ago.

He said he could not remember whether the plan provided by the company’s architects had included the foreshore.