Public land belongs to the public, not government

Regardless of one’s own political preferences or opinions, Partit Demokratiku’s recent complaint about government land transfers will surely resonate among those who are genuinely concerned at the alarming rate at which Malta is selling off public land to private interests.

It is indeed difficult to argue against PD’s main thesis: i.e., that “Public land and sea are being administered as if Malta were governed as a fiefdom, with no laws to limit government […]”; and that “public assets are being misused and our natural heritage is being squandered...”

In the past few years, we have witnessed a plethora of cases of land reclamation and high-rise development where public land was given away for very little. And in the case of Corinthia, it is indeed disgraceful that such a hugely preferential deal – eclipsing even the DB deal on the adjacent ITS site – was granted in exchange for a mere lease.

Details of the renewed lease agreement of public land to International Hotel Investments (IHI) – owners of The Corinthia – do raise a lot of questions. Malta’s parliament now has to vote on whether a deed of lease to IHI, which originally allowed it to develop two hotels on St George’s Bay, can now be changed so that it can develop residential and office buildings – including 12 high-rise units – on the coastline instead.

The €121 million valuation on the land has been dramatically discounted to €52 million: ostensibly because IHI purchased the neighbouring Radisson Hotel, which it will demolish, as well as for the demolition of the Corinthia Marina Hotel. The proposed deed will also allow IHI to transfer all rights and obligations “in whole and in part” to any other company in which IHI is not a sole shareholder, even though IHI will remain responsible for the supervision and management of the project until 85% of the buildings and infrastructure related to the project are completed.

And additionally, the agreement will allow IHI to renegotiate the deal when exceptional “economic and social” circumstances, not foreseen at the time the deed is signed, could result in “disproportionate hardships” for the company to honour the timeline to complete the project.

IHI will also be granted permission to operate a beach concession on the coastline surrounding the hotel, and granted exclusive “power and authority” to allow third parties to use the site.

Bearing in mind that government conducts its negotiations exclusively on behalf of the general public, one might ask why this deal appears to be so generous with the people’s assets: giving away so much, and getting so little in return.

Moreover, the justification of the lease renewal was in part to upgrade the existing five-star hotel infrastructure, to a six-star tourism residential compound instead. But if this is the case, why are we charging one-star prices for an irreplaceable tract of real estate?

These questions gain urgency when one considers that the coastline is defined by the Constitution as ‘public property’ to which access must remain open at all times.

Clearly, both prices and methods used to give away public land for touristic purposes need to be seriously reviewed and assessed… even from a policy angle. This agreement in particular is envisaged to create and sustain a six-star luxury tourist resort development. Yet it is highly unlikely that Malta can currently cater for, or offer, a complete 6-star experience; as such, any visitors to such a resort would end up sorely disappointed if they were to step out of the sheltered existence within the walls of the resort.

The company’s decision to focus its attention and effort on the residential units, in itself, may point to a lack of faith in the touristic element of the project, thus leading the group to focus on the luxury development, which will provide much bigger returns, much earlier.

Either way, one struggles to comprehend why the Maltese government would care so such about private profits, and so little about Malta’s environment and urban well-being. And the IHI deal represents merely one out of countless such decisions, in which governments of all political hues have conducted their affairs almost as if they were subsidiaries of the same private commercial interests they were dealing with: offering generous 99-year leases on priceless public land (in the case of Manoel Island, resulting in the public losing access to its own property for over 10 years); negotiating clauses that are clearly intended to favour the leaseholder, to the detriment of the people; and – arguably worst of all – failing to even give a proper public account of its transactions (citing ‘commercial sensitivity’ as an excuse to withhold information of national interest).

The situation is alarming enough, without also factoring in a previous commitment by the Labour Party to address precisely such lacunae in our system. In the last budget, the government had vowed to set up an agency to review all contracts which ended up in the transfer of public land, perhaps indirectly acknowledging the problem without admitting it.

It is already disappointing that government has apparently forgotten about this commitment. That it would also preside over such a scandalous land transfer only adds insult to injury.