Fortina: Back to the drawing board as latest valuations termed illegal

The Fortina debacle has taken a new twist as Parliament has sent all the different valuations made on a change of use of land, already owned by the hotel group, back to the Lands Authority for a fresh revaluation exercise.

At the same time, the NAO admitted that its separate valuation, made by Forward Architects, and that of Grant Thornton, which were kept under wraps by the former Lands Authority Chairman, do not have any legal standing, as they were not drawn up according to the parameters regulating such valuations under the law.

Following a two-hour debate on the conclusions of the NAO about the Fortina land debacle, the National Audit Office Accounts Committee, presided over by Minister Ian Borg, agreed unanimously on a way forward.

Both sides of the house agreed that all the different evaluations made so far – six in all – will now be sent back to the LA for another review – possibly the seventh.

It was also agreed that while all valuations presented shall be taken into consideration, the LA will have to use its legal parameters – a valuation made by three architects – to establish a result.

It will only be at the end of this exercise, which is scheduled to be concluded in two months, that the Committee will return to discuss the issue and possibly take some form of remedial action.

Minister Borg insisted that Parliament was possibly misled when it was not given all the details and reports made. In 2019, it approved the change of use for compensation by the Fortina owners of €8.1 million.

He stated that if it were found that the LA had charged Fortina less than it should have, the Government would not hesitate to initiate legal action to recoup the lost revenue. However, he emphasised that Parliament is not in a position to state which of the various valuations is the correct version, as that is the remit of the LA and its experts.

An NAO report published a few weeks ago found that a valuation report by Grant Thornton – an audit firm – had established the value of the change of use of land in Tigne at some €21 million. This was in stark contrast to the €8.1 million agreed as compensation by Parliament.

Six different valuations for the same land have been presented so far, ranging from €2.7 million to €23 million.

The legal version, according to the NAO report, was initially €12.3 million, as established by three architects, but was reduced to €8.1 million after the intervention of then-CEO Carlo Mifsud, for unknown reasons.

PN MP Ryan Callus, who was part of the LA Board at the time, stated that the new valuation should consider the entire area of the land, rather than just one part, as was the case in the defective brief provided by CEO Mifsud at the time.

The LA law requires that three architects prepare valuations of government land with a value exceeding €400,000.