Lands dished out €400,000 compensation for €60,000 land in 2011

A thread of emails published by MaltaToday sheds light on the political interference inside the Lands Department – this time on a €60,000 countryside passage in Mtahleb that was expropriated back in 1974, but which returned €400,000 in compensation to its original in 2011.

The Mtahleb land was expropriated for road formation in 1974 – Dom Mintoff’s first legislature after his 1971 electoral win – and for which compensation was paid just four years ago, after much arm-twisting, the emails suggest.

The land in question belonged to entrepreneur Emanuel Peresso, CEO of the Michele Peresso Group of Companies, who received €400,000 cash even though Lands DG Albert Mamo estimated it at just €60,000. 

The emails in possession of MaltaToday show that the then-director general of the Lands Department, Albert Mamo, had estimated the land’s value at just €60,000 and emphatically wrote in communication with former minister for lands Jason Azzopardi that it was inconceivable that higher compensation be given for it.

According to Albert Mamo, Peresso’s land at Mtahleb was outside development zones and therefore its value should be set according to the formulas set out in Chapter 88 as an agricultural piece of land, valued at €60,000.

On 9 October, 2011, Mamo emailed Jason Azzopardi on the Emmanuel Peresso request, who was demanding an amount four times as much as it was worth.

Peresso, Mamo says, had bought the land at a much lower price, and that it was then expropriated for road formation.

It is apparent, from the tone of the email, that despite the €60,000 valuation Mamo sought out a new valuation.

Albert Mamo's email to Jason Azzopardi

“I requested a fresh valuation and the value was increased to approximately €140,000. To this, one has to add damages/interest from the date of taking over of the land, but in order to increase the value as much as possible we took the date of the publication of the government gazette as the date of taking-over, even though the road may have been formed much later.”

Peresso however demanded that he be paid much more, Mamo revealed in his email.

“He still insists that the price of the land is €400,000 and compiled a report by his architect basing his argument on the market price and what the land would actually cost if sold for development today as this was his original intention.”

Mamo therefore suggested that it should be Peresso to contest the price in the Land Arbitration Board, but he said Peresso “criticised us as being unfair with him, mentioning other cases which has [sic] nothing to do with his issue.”

Mamo also complained to Azzopardi that the Lands Department was short of funds, so it offered Peresso a plot for him to develop.

“As a last resort I offered him a decent building plot within scheme…  this plot is developable on three floors and its market price (a conservative price) would be in the region of €360,000.”

Peresso was still not satisfied. According to Mamo, Peresso then started arguing that the area was not good enough, the road was not yet formed and “that he ultimately requires cash as one of his business deals failed”.

Mamo was clear: “I told him that we are already going out of our parameters by offering the plot and that his is now impossible and that therefore the only option left is to issue the gazette and if wishes he can proceed to LAB.”

MaltaToday is not aware as to what Azzopardi replied to Mamo.

Within a fortnight of Mamo’s email, Peresso wrote to the assistant director at the Government Property Department, Margaret Falzon, copied to Lawrence Gonzi, saying:

The email from Emanuel Peresso to Margaret Falzon and copied to Prime Minister Lawrence Gonzi

“The Prime Minister has confirmed to us that the Lands Department has issued another valuation of our taken land at Mtahleb… This new valuation amounts to €140,000 plus damages and interest, from 1974 to date,” he wrote.

Peresso said that although the amount is not what he originally requested, he was accepting the valuation. “[We] sent a letter of thanks to the Hon. Prime Minister on this valuation in Monetary Terms. We are aware that the office of the Prime Minister has advised you on the agreement. Now that we have agreed to this final valuation as worked by your department, it is very important for us that we receive the full payment of €140,000 + damages/interest at your very earliest.”

On receiving this email, that same day on 24 October, Falzon wrote to Mamo. “I do not know from where the €140,000 figure for the land excluding interests was obtained. According to our highest valuation, the price of the land was €59,130 while interests amounted to €58,946, in all €118,076.”

Margaret Falzon tells Mamo she was unaware of the valuation allegedly ordered by the OPM

By 2012, Peresso had been paid what he apparently had requested.

A notarial contract confirms that he was paid €404,020, on condition that he renounces any procedure in the Land Arbitration Board or in the courts. The valuation was hiked up to €206,000 – almost four times its original value – and an extra €198,000 topped up in the form of interest and damages.

The notarial contract which shows the monetary compensation of €400,000 for Peresso

In the wake of the controversial €1.65 million expropriation granted to Mark Gaffarena for his half-ownership of an Old Mint Street, Valletta building, the Nationalist Party has mounted a searing criticism of parliamentary secretary for lands Michael Falzon, notably spearheaded by his predecessor, Jason Azzopardi.

But Lands Department sources have told MaltaToday that in the past it was not unusual that requests for compensation for expropriation were discussed with either ministers or the Office of the Prime Minister.

A source lamented the fact that criteria regarding compensation amounted to a very subjective interpretation and very often depended on the complainant.

Jason Azzopardi reaction

On his part, Jason Azzopardi reacted to the MaltaToday story, published on Sunday, with a Facebook post calling on the Prime Minister to publish the entire expropriation file. "A report by three architects valued the over-eight tumoli of land in 2012, and interest due since 1974. Instead of Labour apologising for the obscenities of the 1970s and 1980s, when it illegally deprived people of their land, it dredges the bottom by spinning outright lies. I will neither cow nor bow to filthy people who want to deviate attention from the corruption in the Old Mint Street scandal."