REVEALED: The Lands Authority’s secret report on Fortina – From €2.7 to €21 million in five different valuations

The Shift is revealing the secret Lands Authority (LA) report, produced by audit firm Grant Thornton, which, according to the National Audit Office (NAO), was kept under lock and key by the then Chairman of the LA, preventing access to the Board, the Minister, Parliament, and the Fortina owners.

According to the report, signed by George Vella, Grant Thornton’s Managing Partner and son of former President George Vella, a desktop evaluation, conducted in a few days, puts the price tag of the change of use of land already in Fortina’s possession at €18.3 million.

The NAO insisted that this was a far cry from the €8.1 million, which the Government, led by disgraced former Prime Minister Joseph Muscat, accepted as the final price.

In its report, Grant Thornton concludes that while the present value (in 2019) puts the permitted hotel development value at the time at less than €1 million, “the present market value of the proposed development on a freehold basis is estimated at €19.1 million”.

According to the audit firm, “the value of change in use from the permitted land hotel use to the proposed development is the difference between the Proposed Development airspace value and the Current Permitted Development airspace value, that is €18,341,559”.

Five different valuations

The Fortina land scandal, which is now subject to another round of parliamentary scrutiny due to the valuation report kept hidden away from everyone, shows a significant disparity in five different valuations made on the exact change of use of the land in question.

The values reached highlight how the government completely messed up the exercise, producing five different valuations in the exact change of use on the same parcel of land.

A report conducted for Fortina by audit firm Deloitte – also used by the government to value other properties, including the former ITS site – put the value to be paid at €2.7 million. This stood in sharp contrast to two Lands Authority valuations, made by experienced architects, which ranged from €12.3 to €8.1 million.

To complicate matters, the secret Grant Thornton report puts the value at €18.3 million, while another separate valuation conducted for the National Audit Office (NAO) by Forward Architects increases the value to €21 million.

According to the NAO, which questions the legality of the Grant Thornthon report when it comes to how public land should be valued according to the LA law, it was the then Chairman of the LA, the late Lino Farrugia Sacco, who for some inexplicable reason, hid the report from everyone, and approved to proceed with the valuation of €8.1 million as discussed by the LA architects.

At the time, Fortina had expressed their shock at the ‘high’ price they were asked to pay for their land’s change of use.

However, according to the NAO, since they were under contractual negotiations on their new project, they had agreed to pay the complete €8.1 million price request, although under protest.

The NAO concluded that this was still not enough.

Fortina says valuations are defective

In a statement reacting to the NAO report and related media coverage, Fortina said it has already identified significant methodological flaws in the evaluations made, upon which the Group maintains serious and well-founded reservations.

It said the Group has not yet been given access to the ‘secret’ valuation report and the one conducted by the NAO.

“The Group respectfully submits that transparency and due process require access to the fundamental supporting documents.”

It also stated that, according to new legislation enacted in 2024, the deal’s terms for valuations of change of use may result in Fortina paying more than necessary.

“Should the same exercise be conducted today under the existing legal framework, there is no doubt that the required waivers would have been obtained at a significantly lower cost than that to which Fortina has committed.”

The LA did not even pay for the report by Grant Thornton – it was paid by the Office of the Prime Minister through the approval of then Chief of Staff Keith Schembri. It cost €15,000.

CLICK TO SEE THE SECRET REPORT: Fortina Evaluation -Final