The European Commission need not bother investigate the deal which saw the Labour government pass over prime public land in the so-called golden-mile in St Julian’s to a private company.
Silvio Debono’s db Group assured everyone, including the Commission, that it had “nothing to hide and nothing to fear” over an impending investigation on whether the deal is in breach of EU state aid rules.
Insisting that the process was fully transparent, db Group said “for the first time in Maltese history, the market value of public land has been set by an auditing firm of global reputation, namely Deloitte.”
If that was the case, then the European Commission might be wasting its time looking into the deal. However, db Group omitted one important piece of information.
Deloitte – one of the four biggest professional services networks in the world – valued the land at €60 million and unsurprisingly this is the price tag set by government but this differs greatly from the value set by the Paceville masterplan.
KPMG – also part of the Big 4 audit firms who among others design tax systems which cost countries billions in lost revenues – had valued the same land at a much higher price. Government’s own masterplan drafted by KPMG, set the value of the land at €8,500 per square metre.
The market value for the 25,000 square metre land given to db Group would therefore be of €204 million and not €60 million.
Why and how lawyers representing government and db Group settled on a €60 million price tag baffles the mind but not one trained on the incestuous nature of politics and big business in Malta.
As former Green Party leader Arnold Cassola pointed out in a Facebook post, “if what db (Group) say is true, does it mean that one of these mentioned companies is actually a charlatan that does not understand anything about valuations?”
Hopefully, Cassola’s initiative to petition the European Commission does not fall on deaf ears in Brussels. Silvio Debono will rake in tens of millions of euros from the controversial deal and according to KPMG, the sale of apartments in the 37-storey residential tower alone should bring in at least €123 million for the group over the first three years of the project.
Moreover, db Group will be paying less than the €60 million price tag. The land was given to db Group on a 99-year emphyteusis who in real terms will be paying a €15 million premium payable over seven years, and €23.4 million for the redemption of ground rent on individual residences included in the project.
A further €11 million included in the €60 million price tag will not be actually paid, but represents the present-day capitalised value of ground rents that will be paid over 99 years.
This alone should be enough to merit an investigation by Brussels and the Auditor General. This government and its predecessors have let the country down for too long. Politicians should act as the guardians of public land and not flog it off for peanuts to an elite group of businessmen who bankroll the two major parties.
The systematic loss of public land to private enterprise, the cementification of the country and unsustainable development does not only have implications for our health and quality of life. It also erodes the very foundations of democracy. The people’s representatives no longer tell us what they can do for us and how they can improve our lives. Instead they only serve money and power.
We essentially have a government (and a parliamentary system) of, by, and for big business. Our democracy cannot be truly representative unless elected officials hear from and legislate in the interests of all of their constituents, not just the rich and the powerful. But such a demand will not be met unless the demand is made.