MEPA’s €8 million car-park booty to be poured into ‘urban projects’ fund

Nearly €8 million raised by MEPA’s Commuted Parking Payment Scheme (CPPS) – the fund that finances the development of public car parks in 11 localities – could be diverted to another fund earmarked for urban embellishment projects.

The idea is floated in a public consultation document published on MEPA’s website, which proposes a January 2012 cut-off date after which the CPPS fund will be subsumed in the Urban Improvement Fund, which already has a balance of €5 million.

This politically strategic move could release funds for much needed investment in the urban regeneration of towns and villages a year before the general election.

But developers are also up in arms against the idea of parking funds being diverted to other purposes. After all, they are the ones who have to pay money into the CPPS when new developments – such as apartment blocks – generate added parking pressures in towns.

“Using CPPS funds for projects other than what they were intended for is tantamount to MEPA having collected moneys under false pretences,” former Nationalist minister and Malta Developers Association president Michael Falzon told MaltaToday.

Moreover, in the absence of transparency the new fund can give rise to “political manipulation”, Alternattiva Demokratika’s spokesperson for sustainable development Carmel Cacopardo has warned.

Since councils will be expected to field a part of the expense through co-financing, Cacopardo fears that councils with “political clout” to obtain additional finance from other government authorities will have an advantage over others. “These other authorities are generally the political fiefdom of the ministers who are politically responsible for them. They will be used to finance projects in the electoral districts of the Ministers who have their fingers on the remote control,” Cacopardo told MaltaToday.

But Cacopardo welcomes the fact that the reform will “streamline existing funds and simplify their operation.”

Projects that can benefit from the Urban Improvement fund include gardens and landscaping areas, playing fields, traffic management schemes, street lighting, street furniture and green transport modes.

According to the proposed changes, the Urban Improvement Fund will issue competitive calls for proposals and on the basis of pre-defined eligibility and selection criteria. Grant decisions will continue to be made by the UIF Committee, whose composition “may be broadened to include a representative of NGOs.” A programme administration unit will manage the day-to-day operations of UIF which will to be established within MEPA.

Cacopardo insists on further safeguards to ensure that the process is not contaminated by political manipulation, insisting that decisions on the financial allocations must be taken by a team which is not only beyond reproach but which is made up of persons who are “cognisant of the havoc which the unbridled development permitted by MEPA over the years has sown amongst our local communities.”

MPs pandering to lobbies

The Malta Environment and Planning Authority justifies scrapping the car park fund because of  “an evident difficulty in identifying projects, in designating public land that is available for the carrying out of such projects and in finding a private partner who can make this operation take off and be viable.”

MEPA has spent just a little more than €1 million for the development of public car parks and traffic facilities, €697,253 of which were spent on the park and ride in Floriana.

Falzon disagrees with MEPA’s justification for subsuming the parking fund into the urban improvement fund, insisting that the failure to find car parks is a “political failure” resulting from the pandering of politicians to “voters’ short sighted complaints.”

He cites Sliema as an example of a locality where all spaces for car parks indicated in the Local Plan have had to be given up because of pressure from “short-sighted people who resisted any car parks in the vicinity of their homes.”

Another example cited by Falzon is Valletta where MEPA approved the erection of a parliament building in a space that was reserved for car parking in the Local Plan – without any compensation for alternative parking sites. “This was yet another case of short-sighted politicians ignoring the long-term effects of their decisions”.

“Rather than trying to spend the CPPS funds elsewhere, MEPA should make serious attempts with Local Councils to find spaces for much needed car parks,” Falzon insisted.

“Has MEPA, together with a Local Council, ever issued a call asking for private investors to provide a car-park with details of site, fees to be charged and subsidy (from CPPS funds) expected?”

The spectre of Hexagon House 

But Cacopardo also laments the lack of transparency, recalling how in 2008 the planning authority found no problem in helping itself to the fund for an interest-free €3.1 million loan to purchase Hexagon House in Marsa from HSBC, which cost €4.3 million in total.

According to the Green Party spokesperson, MEPA has failed to explain how MEPA itself has abused the CPPS to fund the purchase of Hexagon House during the tenure of the present Chairman.

“It also fails to explain if and when the monies used to purchase Hexagon House have been refunded in order that they may be used for their original purpose.”

MEPA’s roadmap for fund reform

The public consultation document proposes a January 2012 cut-off date, through which CPPS funds will no longer exist as a separate mechanism for administering funds and will be subsumed within the Urban Improvement Fund.

The fund was established in 2005 to support projects implemented by councils or government agencies for the purpose of carrying out improvements in urban areas, such as landscaping, traffic management and other embellishment works.

The UIF fund is presently financed through a “planning gain” mechanism on development projects and has a balance of  €4,933,615.17.

Funds will continue to be earmarked for specific projects in the localities from which these have been generated; however the UIF policy will be amended so as to allow proposals that involve several localities together.

New fund for national projects

Alongside the UIF, another fund called the Environment Improvement Fund” (EIF) will be set up to replace the Environmental Initiatives in Partnership Projects (EIPP), which presently has a balance of €326,172.

Unlike the UIF (whose funds are earmarked to assist local projects), the EIF will fund projects of national importance. The MEPA Board will take final decisions on which projects merit funds from the EIF.

Significantly, according to the reform blueprint, the Office of the Prime Minister will be informed about the “specific priorities” of this fund. The EIF will be financed from planning gain contributions on major projects, from forfeited bank guarantees, and from 10% of UIF, which will be devolved into the EIF.

One notable change is that the CPPS policy shall be revised to introduce a minimum threshold for the maximum number of forfeited parking spaces that can be compensated through CPPS contribution.

In this way, developers will have to provide an element of parking spaces, rather than simply pay for the inconvenience caused.

What is MEPA’s CPPS fund?

Developers undertaking construction projects in 11 major Maltese localities pay the CPPS fee. By 2009 businesses in Sliema and St Julian’s alone have contributed €3.7 million to the CPPS.

MEPA present policy clearly states that the Commuted Parking Payment Scheme is to be used “for the construction of car parks as well as for the provision of local public transport systems and infrastructure of ancillary facilities.”

Funds can be spent on public transport infrastructure such as bus lanes and priority measures, bus shelters, signage and line markings; the improvement of information to the public, such as real-time information on bus stops, better route-maps or user-friendly timetables.

The CPPS is financed directly by fees paid by developers, businesses and shop owners pay to MEPA if they are unable to provide the required parking facilities for their projects – for example, underground garages for a block of apartments.

The fee applies to all developments entailing a change of use of an existing building to a new use that carries a higher parking requirement than the old one, for example change of use from a shop to a restaurant or bar.

The fee is also charged when a developer builds additional floors on top of an existing building as well as on all developments in Urban Conservation Areas, or areas proposed for pedestrianisation. Of the €10,657,430 collected till 2009 from the private sector, MEPA has spent: €128,115 for the free Christmas bus service in 2007; €74,538 for a new car park in Constitution Street, Mosta; €5,648 to fund a planning application for a car park in St Paul’s Bay; and €7,304 for a new resident car park in St Julian’s. €159,383.17 were later allocated for a car park in Hamrun.