As public anger still rages over a mammoth project in St George’s Bay that had first received the full blessing of the government and then the approval of the Planning Authority, yet another has now been added to the growing list of developments over which taxpayers may rightly feel to have been cheated by their own government.

The latest – that over the 50-year rent-free concession for the building of the national aquarium in Qawra during the last lap of the Nationalist administration – may not compare to the mega db Group project to be built on land handed out to the developers at a price generally considered well below its real value and which, many insist, will lower the quality of life of hundreds of families living in Pembroke. Yet, it again confirms the feeling that the taxpayer is getting the short end of the stick.

The high-end national aquarium complex has greatly enhanced the locality and can be considered as a first-class tourist attraction. It is nicely done and generally well maintained. It has also kept up its good standard in terms of both service and cleanliness. But the concession contract contained a few shortcomings that do not help provide what the National Audit Office calls a balanced partnership in terms of project benefits.

At issue in this contract is not just the real value of the land but also the claw-back clause, which, in the opinion of the Auditor General, should have been stricter. The permanent capital injected in the project by the three main contributors amounted to about €15.45 million (€6.6 million by the contractor, €7.5 million by the EU and €1.35 million by the government). This excludes the value of the land foregone over the concession period.

The performance audit estimates that the present value of land foregone varies at between €2.6 million and €28.5 million, depending on the market value that was to be attributed to it. However, while the Audit Office attributed an average value of €15.5 million, the Malta Tourism Authority contended it was the €2.6 million that had to be considered for the purpose of the exercise since it reflected the lack of previous market interest in the project.

The Auditor noted that the major question lingers as to how sufficient was and will be the return of capital to the government over the project period. He zeroes in on a key point, which is what matters most now: the need of an improvement in the systems “to ensure the appropriate attribution to the valuation of public land concessions in various commercial, semi-commercial and non-commercial settings”.

In the case of the national aquarium, since the government is not a beneficiary of revenues generated by the project, a financial imbalance was created in the returns attributable to the government. The Audit Office thinks this could have been rectified through a much stricter claw-back clause calling for compensation for the land concession. Since the aquarium has had a better-than-expected performance, this makes a great deal of sense.

At a time when projects involving the transfer of public land and other assets, such as hospitals, are mired in deep political controversies, it is well to heed the wise recommendations made by the Auditor General to safeguard the government’s position and, therefore, the taxpayers’ interests.

This is a Times of Malta print editorial

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