Expropriation can only be justified for public use

Though ostensibly presented as a project serving the national interest, the Paceville master plan emerged under scrutiny that the plan itself is far more concerned with creating lucrative development opportunities for the construction, property and hospitality sectors

8 November 2016, 7:31am
The so-called ‘Paceville master plan’, launched in recent weeks, has quickly become a source of embarrassment to the government.

What initially appeared to be a genuine, well-meaning exercise was soon mired in a number of controversies. Though ostensibly presented as a project serving the national interest, it emerged under scrutiny that the plan itself is far more concerned with creating lucrative development opportunities for the construction, property and hospitality sectors.

In itself, there is little harm in that... until one pauses to consider the exorbitant costs – social as well as financial – being proposed.

Even before examining the plan in any detail, there are serious reasons to doubt the declared intentions. During a Planning Authority presentation to Parliament’s environment and planning committee, Opposition MP George Pullicino asked whether the consultants who had helped in the drawing up of the master plan had been verified to not have provided consultancy services to any developers.

One would assume such basic due diligence would have been carried out as a matter of course. Yet it transpired that Mott MacDonald, one of the consultancy firms entrusted with the mater plan, had drafted engineering reports for the Mercury House project, which envisages two skyscrapers on the 80,000 square metre site in Paceville.

Mott MacDonald official Damien Price told MPs at the environment and planning committee that they had verbally informed the Planning Authority’s executive chairman, Johann Buttigieg, but were given the go ahead as it did not constitute a conflict of interest.

Buttigieg continued to insist that there is no conflict of interest. He is however mistaken. A conflict does indeed exist, and is further exacerbated by the fact that the master plan itself places the Mecury House project at the centre of the redesigned urban area. On this basis alone, the master plan should be discarded and a new one drawn up: preferably, by consultants who have no links to the businesses that will profit the most from this affair.

A second, arguably more serious conflict of interest concerns the fact that the parliamentary committee itself is chaired by Labour MP Franco Mercieca, who is still listed as a 10% shareholder in property development firm Menfi, together with Joseph Portelli, who is – separately from Menfi – the developer behind the Mercury House project.

This newspaper has repeatedly flagged the issue of part-time MPs who are allowed – of necessity, not for policy reasons – to retain private commercial interests. Given their part-time status, it would be unreasonable to preclude any extra-parliamentary interests at all. But when such interests collide with the nature of one’s parliamentary work – as is clearly the case here – then, at minimum, the MP should not be permitted to chair the committee. In all sincerity, this should be too obvious to even have to point out.

But the most contentious issue by far remains the proposed expropriation of private residences and businesses: which, according to the plan, stand to be handed over to private companies for re-development, when expropriation usually involves property taken over by the government for public use.

This prompted a consultation meeting organised by Kamp Emergenza Ambjent (KEA) and the St Julian’s local council, which was attended by around 200 people. Many residents, local and foreign, expressed disbelief and anguish at the idea that they might be forced to relinquish their property rights – against compensation, granted, but still reluctantly – for no other ‘public’ purpose than to create new business opportunities for others (including, in the case of entrepreneurs, their direct competitors).

If this plan were to be realised, it would constitute a gross violation of human rights that could well end up in the European Court. Maltese law envisages expropriation of private property only in cases that serve a public interest. By no stretch of the imagination can the term ‘public interest’ be extended to cover private hotels, catering establishments and apartment blocks.

Apart from the injustice to the property owners, it would also be unfair on the taxpayer. The cost of appropriating land to create new public areas in Paceville will be between €144 million and €151 million. That’s a high price for the taxpayer to pay, merely for the government to buy out private properties and hand them over to chosen businesses. Not only is this an egregious waste of other people’s money, but it would also make the taxpayer an accomplice in an aggressive, forced property take-over.

Unfortunately, this is indeed the paradox that much of our economy has been built upon in recent decades. Paceville would not be the first example of government colluding with the private sector at the taxpayer’s expense. The Corinthia brand originated in 1969 with a £400,000 government grant and a 10-year tax holiday on construction imports; even in the 1990s, the Tumas Group was leased the land at the old Hilton in St Julian’s for €445,000 until 2114, before it was actually sold for a paltry €1.8 million in 2006. A penthouse at Portomaso is now on sale for €2.6 million.

The deleterious effects of partnering with insatiable developers has come at the cost of citizens, denied the protection of planning authorities too spineless to uphold the rules. The Paceville ‘master plan’ is merely an extension of the same wasteful, short-sighted policy. As such, it should be rethought from scratch... along with the policy.