Owners of Burmarrad Commercials gifted 65 year emphyteutical deed starting at €1 per month

Burmarrad Manufacturing Ltd was awarded a 65 year emphyteutical deed for a  9,000 square meter site  — equivalent to one and a half full-sized football pitches — in the Marsa industrial estate, that formerly housed Union Print. The company is owned by the Gauci family, who also own Burmarrad Commercials.

In another sweetheart deal conducted by INDIS Malta, Malta’s industrial parks agency, Burmarrad Manufacturing Ltd, was exempted from paying for the full value of the site for the first year through a side letter issued in November 2019 by former Malta Industrial Parks CEO Karl Azzopardi.

The side letter states, “Notwithstanding the provisions of the emphyteutical deed, the ground rent due from 28 November, 2019 up until 27 November, 2020, shall be of €1 excluding VAT per month, this first payment of €1 excluding VAT becoming payable on 28 November, 2019”.

This means that for the first twelve months of the 65 year contract, Burmarrad Manufacturing Ltd paid a total of €12 instead of the full €123,274 they would have had to pay for their first year.

Six months after the deed was signed, Prime Minister Robert Abela visited the company, praising it for its “dynamism” and “confidence in the Maltese economy”, according to a May 2020 news brief.

According to the deed, the planning use for the building refers to “the repair, maintenance, overhaul and bodybuilding of vehicles for commercial uses”. Despite the company’s name, no actual manufacture seems to be set to occur on site, according to its own planning brief.

This wasn’t the first sweetheart deal between INDIS Malta and individuals and companies known to be close to the government.

On 24 February, The Shift revealed that Media Today co-owner and government PR consultant Saviour Balzan was awarded a 15 year lease for a factory site in the Mosta Technopark industrial estate, with a side letter that is almost identical to the one issued for Burmarrad Manufacturing Ltd, awarding the same generous type of discount to Balzan’s company, Business 2 Business Ltd.

In the case of Burmarrad Manufacturing Ltd, the emphyteutical deed ties the concession to a condition that the company must ‘improve’ the site through a €3 million investment.

According to permits issued by the Planning Authority in 2019, Burmarrad Manufacturing Ltd changed the use of the site to a Class 5B general industry facility, and included the construction of a VRT station and a related office, guard room, and parking area. Further amendments were made to the site a year later, including the construction of underlying storage and an extension to the office block.

The Business Promotion Act states that such industrial sites should be awarded to “beneficiaries” involved in “the production, manufacture, assembly, processing, repair, preservation or maintenance of any goods, materials, commodities, equipment, plant or machinery”.

As in the case of Business 2 Business Ltd, questions remain as to what justifies the provision of this enormous tract of industrial land to a company that does not manufacture goods on-site.

The Burmarrad Commercials empire

Burmarrad Commercials, established by Mario Gauci in 1984, is one of the largest vehicle leasing operators in Malta. The Gauci family are known to be frequent donors to both of the major political parties, and have been regular beneficiaries of government business from different administrations.

Burmarrad Commercials leases a significant percentage of its vehicles to the government, with particular authorities including the Public Broadcasting Services and the Water Services Corporation being serviced almost entirely by its vehicles.

The company angered residents in its namesake village in 2018 when the Planning Authority agreed to alter the local plan for a 20,000 square meter section of Burmarrad that included the company’s premises. The decision opened up a relatively low lying area to full commercialisation by changing the one-storey building limit previously included in the local plan to allow four-storey commercial developments.

The Gauci family’s interests in the 20,000 square meter area are not limited to Burmarrad Commercials’ grounds. They also owned a nearby site that eventually became the Kiabi building.

The Gauci family applied for a major redevelopment of their Burmarrad premises in 2021, making full use of the Planning Authority’s revision to apply for a four-storey complex that would see the built up site increase from 852 square meters to 4,600 square meters.

Featured photo – Burmarrad Commercials Chairman Mario Gauci.