The government and the Corinthia Group are currently conducting delicate negotiations over “financial compensation” owed to public coffers for the building of several residential villas on the site of the former Hal Ferh complex in Ghajn Tuffieha, The Shift can reveal.

Although any financial compenssation is supposed to be unilaterally determined by the government, according to a 2009 deed, Prime Minister Robert Abela has directed the Lands Authority to try to “accommodate” the hotel chain.

Sources within the Lands Authority confirmed that negotiations over Hal Ferh are ongoing, although no agreement has yet been reached. Yet new plans now allow Corinthia Group to build 25 detached luxury villas for residential purposes on prime public land handed out specifically for tourism purposes.

Asked by The Shift to give details on the value of the compensation requested from Corinthia Group, Lands Authority spokesperson Janice Bartolo did not reply. She also ignored questions on which architects were commissioned by the Government to make the necessary valuation.

A spokesman for Corinthia Group said the issue is still to be determined by the government.

The Hal Ferh story

A former British military barracks at Ghajn Tuffieha covering an area the size of some 12 football pitches, the site was developed into a tourist complex by Air Malta in the 70s.

After running into financial difficulties, the national airline sold the complex by tender to Island Hotels Group, on condition that the former public land was to be used only for tourism purposes.

A planning permit was issued in 2013 for the transformation of this complex into some 216 timeshare apartments with accompanying facilities.

The area of the Hal Ferh complex now owned by Corinthia Group.

Following a 2015 takeover of the Island Hotels chain by Corinthia Group, pressure increased for the government to change plans and allow part of the development for residential units.

Last year, after less than a month of public consultation, the Planning Authority proposed a change to the area’s local plan so that part of the Hal Ferh complex would be used for residential purposes.

The proposal was approved by the Environment and Planning parliamentary committee with government MPs voting in favour of the changes and the Opposition MPs voting against.

The new plan allows Corinthia to use a third of the Hal Ferh complex to build 25 detached luxury villas for residential purposes. This significantly increases the value of the land.

The last hurdle

The only issue that remains before Corinthia presents its new application to the PA is the issue of financial compensation.

According to a clause in the 2009 deed, the owners of the land would have to compensate the government in case of a change of use of the area from tourism to other uses.

The deed, seen by The Shift, states that in such an eventuality “an architect or architects appointed by government in its absolute discretion are to determine the quantum for a financial consideration over and above what has already been paid to government for the site taking into account any partial change in use”.

Through this deal, Corinthia will be able to build villas with a total gross floor area of up to 9,000 square metres, fetching millions at current market prices.

Just a few years ago, in 2015, Corinthia Group had already attempted to transform public land at St George’s Bay, granted to them to support the national tourism effort, into a land speculation project.

Chairman Alfred Pisani had signed a memorandum of understanding with disgraced former prime minister Joseph Muscat to change the use of the land at St George’s Bay hosting three of their hotels. Following public outrage, including threats of a State aid complaint to the European Commission by rival developers, the government and Corinthia shelved the project.