Land swap resolutions will return Żonqor to public, transfer AUM campus to Smart City

Government will take back almost 45,000sq.m of land at Smart City, part of which will be leased out to the American University of Malta in two back-to-back deals.

The details are found in two resolutions that Economy Minister Silvio Schembri has presented to members of parliament’s National Audit Committee on Wednesday.

The land swap also sees the Żonqor Point area originally granted to AUM being returned to the government.

The resolutions seen by MaltaToday do not reset the contractual time periods of 99 years for both Smart City and AUM but include new obligations on all parties.

The resolutions will have to be discussed and approved by the parliamentary committee in the coming weeks so that government can actually sign the new contracts.

Under the new terms, Smart City is obliged to build a hotel, a primary and secondary school, and develop 7,000sq.m of land for commercial purposes in the first phase, which should be concluded five years from the issuance of relevant planning permits.

Economy Minister Silvio Schembri, whose remit includes the Lands Authority, is fronting the two resolutions that will be debated in parliament

In the second phase, Smart City will have to complete the rest of the project that also includes residential development, in the subsequent five years.

The parcel of land relinquished to the government at Smart City is split up in three. One parcel is where government is planning the construction of a new campus for the Institute for Tourism Studies (ITS) and for which plans have already been submitted to the Planning Authority. Another parcel of land will be developed by government into a public garden with an underground parking facility.

The largest parcel, covering more than 31,500sq.m will be leased to Sadeen Education for the construction of an AUM campus instead of the Żonqor site.

This will create an education eco-system comprising the ITS and AUM campuses, and the schools Smart City is obliged to build that will cater for the children of knowledge workers attracted to the area.

New obligations

• Smart City will have to develop a primary and secondary school
• Government will have to build a connecting road between Żabbar and Kalkara
• Government will have to build an underground car park in Smart City
• Open spaces at Smart City to increase
• AUM will give up land at Żonqor in Marsaskala and a car park area in Bormla
• AUM will be granted land at Smart City to build its campus
• Government will develop St Paul’s car park area in Bormla as an open space

However, government is also committing itself to build a connecting road to Smart City between the Bieb is-Sultan area in Żabbar and the Cappuchin’s convent in Kalkara; develop part of the Smart City ring road; and provide a free shuttle service between Bormla and Smart City.

The renegotiated Smart City contract will see the annual lease being reduced in proportion to the land given up and the public open spaces within the project increasing to 130,000sq.m from 118,000sq.m.

Meanwhile, Sadeen Education will be handing over to government the stretch of land at Żonqor Point covering 41,000sq.m and two parcels of land in Bormla, known as St Paul’s car park, covering almost 5,000sq.m.

The Żonqor area will remain an outside development zone, while government will develop the St Paul’s car park area, situated between Bormla and Isla, into a public open space.

The land swap will see Sadeen Education taking possession of the site in Smart City and five warehouses situated within the Bormla campus area, whose entrance abuts onto the land already granted to the university.

Sadeen’s lease payment to the government will remain the same as that originally agreed in the 2016 contract.

Prime Minister Robert Abela had announced the deals before the election and pledged to table the agreements in parliament in the first 100 days of the new administration.

History of Smart City and AUM

Smart City Malta was a venture between Dubai-based Tecom Investments and the Maltese government, which retains a 10% shareholding. The original deed was signed in 2007 with the aim of creating a knowledge city that would attract foreign direct investment.

The Tecom had to invest €285 million in the project that had to create 5,600 new jobs over 14 years but plans went haywire soon after the 2008 financial crisis hit.

Two office blocks and a central lagoon were built but the rest of the site remains undeveloped. A parcel of land was sold to private investors who are developing the Shoreline complex, which includes apartments and a commercial centre.

The American University of Malta was the brainchild of Jordanian development company Sadeen Investments, which had to develop a campus for 4,000 students and create 300 jobs.

The deal was signed in March 2016 after parliament approved the transfer of land at Marsaskala and Bormla in a night-long sitting.

AUM was mired in controversy since the Żonqor site in Marsaskala was mostly an ODZ area and the company’s credentials were questioned.

AUM has developed part of the Bormla campus but student recruitment has fallen below initial expectations. The new arrangement removes the controversy over the Żonqor site, which is likely to give the project a new lease of life.

Sadeen will remain bound by the original conditions that the Smart City site be developed into a university campus and nothing else.