Fortina: Back to the drawing board

Parliament is set to receive yet another valuation of the controversial change-of-use concession granted to the owners of the Fortina Hotel, after the Lands Authority decided to discard all previous assessments – including those commissioned by the National Audit Office – and restart the process from scratch.

The decision, announced during a sitting of parliament’s National Audit Office Accounts Committee, marks the seventh valuation exercise linked to the Fortina site in Sliema, one of the island’s most prominent waterfront locations.

The committee is chaired by Deputy Prime Minister Ian Borg.

Robert Vella, chief executive of the Lands Authority, told MPs that the valuations relied upon by the NAO were “technically flawed” and “illegal”, arguing that the authority could not proceed on the basis of what he described as defective methodologies. He said this left the Authority with no option but to initiate a fresh technical exercise to establish what he termed the “right and proper” value of the concession.

The NAO had based its report on a Grant Thornton report – commissioned and kept under wraps by the Lands Authority –  and Forward Architects to assess the value of lifting restrictive land-use conditions on a tract of land already in Fortina’s possession.

Forward Architects is a private architectural practice co-founded by Christopher Micallef and Michael Pace.

Vella dismissed both studies, saying they were drawn up illegally and have many technical flaws.

Instead, the new valuation will be carried out by the same three architects – Dennis Camilleri, Claude Mallia and Mario Cassar – who conducted the original 2017 assessment for the Lands Authority. That valuation concluded that Fortina should pay €8.1million  for the change of use, clearing the way for the development of a mixed-use project that includes hotel, residential and commercial components. Vella said the new exercise is expected to be completed by May.

The move prompted a sharp reaction from the opposition.

Nationalist Party MP Darren Carabott accused the Lands Authority of attempting to sideline the NAO’s findings, which concluded that Fortina had paid substantially less than it should have.

“This looks like an attempt to bury the audit’s conclusions,” he told the committee.

Minister Borg rejected that characterisation, insisting the objective was not to undermine the NAO but to ensure that the valuation exercise met the necessary technical and legal standards.

“The NAO is not beyond scrutiny,” the minister said, adding that if experts engaged by the auditor had erred, those errors needed to be corrected.

The dispute has its roots in a long-running controversy over the valuation of public land concessions in Malta.

In September last year, after an investigation spanning more than four years, the NAO concluded that the €8.1 million paid by Fortina for the removal of restrictive conditions was not based on sound valuation principles.

According to the auditor, a fair value assessment pointed instead to a figure closer to €21 million, implying a significant loss to the public purse.

Fortina, which paid the €8.1 million demanded by the Lands Authority under protest, argued that it was overcharged when compared with similar concessions granted elsewhere. The company has also challenged the NAO’s conclusions, maintaining that the audit relied on inappropriate assumptions.