A development at the heart of a controversy over the narrowing of Mellieħa bypass was granted special status exempting foreigners buying apartments there from having to obtain an AIP permit.

An AIP permit is required for property acquisitions involving both EU and non-EU citizens who have not resided in Malta for at least five years and are purchasing a secondary residence on the island.

No such permit is required if the property is located within “special designated areas” established from time to time by the government under the Immovable Property (Acquisition by non-residents) Act.

This exemption is normally granted to attract foreign investors to acquire luxury properties in highly-sought areas.

Portomaso, in St Julian’s, SmartCity at Ricasoli, Tignè Point, in Sliema and Fort Chambray, in Gozo, are among the zones listed as special designated areas.

Southridge, as the massive real estate project still under construction by GAP Holdings in Mellieħa is called, has also been included in the list by means of a legal notice published by the Finance Ministry on Tuesday.

The only other site in this locality that had already been granted this status was Tas-Sellum Residence, overlooking Għadira Bay.

The Southridge controversy was fuelled by the government’s decision to narrow the Mellieħa bypass so the development can have its own service road.

This became known last March through a parliamentary questions tabled by Nationalist MP Robert Cutajar.

The decision came under a barrage of criticism, amid accusations the government ceded public land to accommodate a developer.

Moreover, the encroachment on the arterial road left motorists fuming as it created a bottleneck.

Though Transport Minister Ian Borg initially justified the move saying the road would become safer, he later backtracked in view of mounting criticism and a petition that attracted over 3,000 signatures.

Consequently, it was announced that the bypass would be re-designed to keep its existing four-lane configuration while accommodating the service road.

The project, which is now almost complete, costs €2 million.

Read: Ombudsman to investigate ‘suspicious’ bypass decision

In a further twist, the new service road had to be demolished within weeks of its construction after it transpired there had been a miscalculation because the adjacent carriageway had become too narrow to take two lanes, as promised by the government.

Consequently, the service road had to be built from scratch, shifted inwards by about a metre.

Transport Malta, which is overseeing the works, would neither say how much the alteration cost nor who would be paying for it.

Replying to questions by the Times of Malta, a spokesman said details, including final costs of all works involved, could not yet be confirmed as the project was still in progress.