Update 2 | PL raises questions over €2.2m property acquisition • PN: 'storm in a teacup'

Labour raises questions over €2.2 million property acquisition

The Labour Party called on former Nationalist ministers Tonio Fenech and Jason Azzopardi to explain why they agreed to pay €2.2 million for the acquisition of HSBC Malta’s Valletta offices, against the advice of the finance ministry’s permanent secretary.

Addressing a press conference at the Labour headquarters, deputy leader Toni Abela and backbencher Silvio Schembri questioned the “unorthodox” manner by which the acquisition took place. The party not only questioned the €2.2 million forked out for a property whose emphyteusis would expire in 11 years, but expressed concern at how the advice of the finance ministry’s permanent secretary was ignored.

MaltaToday reported on Sunday that Alfred Camilleri had opposed a decision to acquire the HSBC offices, in the belief that the government was forking out more money than it ought to. He questioned the way negotiations developed and a decision to agree to a ‘tale quale’ condition without the proper due diligence being carried out first.

It emerged that, despite original plans to move the Attorney General’s out of the Presidential Palace by mid-2011 into the new property, refurbishment works worth €250,000 had to be carried out. The property remained vacant until Tourism Minister Edward Zammit Lewis moved in.

Labour’s deputy leader questioned why the previous government had bought a building that was in desperate need of expensive refurbishment when the reason behind the acquisition was the urgent transfer of the AG’s offices.

“More than anything, this is yet another confirmation of how the previous administration used to ignore the advice of the institutions. One cannot but comment on the clear lack of long-term planning. There are several questions that need an answer,” Abela added.

Asked by MaltaToday, Abela agreed that a reform of procurement regulations and government departments was needed. “I am convinced that we will experience changes in this legislature to allow for the necessary scrutiny and effective remedy,” he said.

Schembri said Azzopardi should “hold a press conference” and answer the questions being raised, including why the government had acquired the property, only to leave it vacant.

“What prompted the ministers to go against the permanent secretary’s advice and will they appear before the Auditor General to give an explanation?” Schembri asked.

Among other questions, the Labour MP went on to ask what had prompted the Government Property Division to set the negotiating price at the higher valuation. The HSBC property was valued individually by architect Joseph Spiteri – head of department at the Faculty for the Built Environment at the University of Malta – and another by Anton Zammit. Their valuations differed by around €100,000, but the GPD chose to go by Spiteri’s higher valuation of €2.5 million “to be used for a solid offer to HSBC” as it was nearer to HSBC’s valuation.

“Public institutions should always defend the interest of the public, even if the difference would of a €1. What prompted the GPD to choose the higher valuation? Whose interest was it protecting?” Schembri said.

PN reacts: 'It's a storm in a teacup'

In a reaction, the Nationalist Party accused the PL of “trying and sell something which is not news to journalists in the midst of summer”.

“However, a party which is stooping low in its levels day after day, will do anything to try and distract people’s attention from their own scandals,” the PN said.

The PN said Abela should speak about Michael Falzon's role in the acquisition, by BOV, of House of Four Winds.

“This amidst facts emerging day after day with regards to the unique ‘early termination benefit from BOV’ and Michael Falzon’s involvement in the Gaffarena scandal,” it said.

“On his behalf, PL backbencher Silvio Schembri could have given a thorough explanation of all the roles that he has been given by this government, and the payment of a minimum of €65,000 he is being paid every year.”

The PN also said that Abela and Schembri repeated “half-truths to deceive both the journalists and the public in general”.

“If Labour really believes that there is some wrongdoing in this deal, it should publish all the file, together with the files related to the Cafe’ Premier and Old Mint Street scandals,” it said.

The HSBC property is one of five cases presented to the Auditor General for an investigation.

“Labour has once again failed in going through all the files of previous years within the Lands Department to try and find something to attack on. Muscat’s party is now really clutching at straws. Today’s press conference is really a storm in a teacup,” it said.