Public land next to Edible Oil site given to big business at below market prices

A public plot of land in Marsa the size of four full-size football grounds is to be handed over to a group of big business concerns at obsolete market prices for development into a multi-million-euro project.

The move, described by the Opposition as “not in the public interest”, is captained by Lands Minister Silvio Schembri, who has made similar deals on other parcels of prime public property in recent years.

The deal in question, which requires a simple majority vote in Parliament to be approved, involves the area which includes the former Edible Oil refinery in Marsa that was closed several years ago.

The deal negotiated by the Lands Authority under Schembri’s guidance involves a total area of 44,000 square metres in the area of Marsa known as Tal-Imgieret.

Half of the plot is owned by Regeneration Projects Ltd, a consortium in which Burmarrad Commercials and Tum Invest are the majority shareholders.

The other half is owned by the government and given out on a temporary emphyteusis for 99 years in the 1960s.

Through a new resolution tabled in Parliament, the government will extend the emphyteusis in favour of the private consortium by another 25 years, with the annual ground rent remaining frozen for the next 40 years at just €55,000 a year.

The government has also agreed that a revision of the current ground rent will take place 40 years from now, in 2063.

Schembri has also agreed that the conditions imposed on the other half of the land in question, which was sold to Edible Oil in the 1960s and transferred to the business concerns in 2018, will also be lifted for a one-time payment of €2.5 million.

Those restrictions, which until now dictated that no development can take place in some areas of the plots and that the rest is to be used only for farming activities – a poultry farm and processing unit – will open the way for the consortium to develop a multi-million-euro mixed development project including showrooms, offices and retail including entertainment and food and beverage outlets.

With the lifting of the conditions, the land’s value is expected to increase by millions of euros.

The Opposition has called for a revision of the valuation attached to the level of compensation – which was last done by the Lands Authority and based on now outdated 2019 prices.

But Schembri deemed the call for such a revision as “frivolous” and insisted the government did not have time to undertake a new valuation to reflect current market prices.

PN spokespeople who have already voted against the government’s resolution at committee stage described Schembri’s latest move as yet another instance of the government giving away valuable public land and assets to big business at ridiculous prices.

PN MP Darren Carabott said, “Everyone knows that the price of Malta’s limited land has exploded since 2019, and it makes no sense that Minister Schembri gives away valuable public assets at 2019 prices in 2023.”

Carabott insisted that while the Opposition “favours development and progress”, it has to be done on a level playing field where all investors receive equal treatment instead of backroom deals at ridiculous prices.

Schembri now insists that he will not change his position and will proceed with the vote in Parliament.

Who conducted the valuation?

In 2018, the Lands Authority selected three architects – Claude Mallia, Mario Cassar and Anthony Robinson – to ascertain the land’s value with the 1960s’ restrictions being removed.

They came up with a valuation a few months later and advised that the conditions should be lifted against a one-time payment of €2.5 million. No second opinion was sought.

Property market prices, including those for commercial use, have increased drastically since 2019.

According to the Opposition’s own valuations that it conducted privately, the price tag attached to lifting those conditions at 2023 market prices should be much higher now than in 2019.

Yet the minister is refusing to budge.

The beneficiaries

The new deed, expected to be signed following the approval of Minister Schembri’s parliamentary resolution, is to be struck with Regeneration Projects Ltd, a consortium set up in 2018 when it purchased part of Edible Oil’s massive site.

With Oliver Brownrigg, Silvan Fenech and Mario Xuereb sitting on its board, the company has a majority shareholding in BCBT Projects Ltd – owned by Brownrigg, Xuereb and Mario Gauci of Burmarrad Commercials.

Tum Invest, owned by Ninu Fenech of Motors Inc and his sons Silvan and Matthew, holds 25% of the shares.

Other companies, including property developers Tal-Herba Estates Ltd and Three MV Ltd, are also involved.

Through a project already approved by the Planning Authority, the area is to be turned into a €25 million development, including showrooms, warehousing, light manufacturing, offices for lease, leisure and entertainment facilities and a number of commercial activities.

Since being made responsible for both the Lands Authority and INDIS Malta,  Schembri has been involved in the commercialisation of various parcels of land for private commercial development, such as in the cases of  Paul Attard of the GAP Group, Anton Camilleri for the Villa Rosa site, the Zammit Tabonas for a new sea concession for the Fortina Group and others.

The Shift has also revealed that connections between the Luqa minister and big businessmen go further than government deals.