€4.3 million expropriation deal reached on eve of election

Despite owing over €80 million in compensation to landowners whose lands were expropriated by the state, a restaurateur was awarded a €4.3 million land swap in a compensation deal brokered just four days before the 2013 general elections.

The former Nationalist government gave Raymond Vella, owner of the now-demolished Mare d'Oro restaurant in Fekruna Bay, Xemxija, over 5,6000 square metres of land in Wied Ghollieq in San Gwann and Ta' Xghajrat in Swieqi, valued at  €4.3 million.

The 1,443 square metres of land in Fekruna Bay were valued at €4.9 million on the basis of the sort of development permitted under the local plan approved by the Nationalist government in 2006, which foresaw a "leisure coastal facility" and residential units built on the same area.

Former parliamentary secretary for lands, now Nationalist MP, Jason Azzopardi confirmed that the deal was struck days before the March 2013 election because the process to find land at a similar value had been a complicated one that had taken months. "I have nothing to hide on this matter. In fact I invite you to look at the file of this case which includes all documents and reports related to the valuation of the land in question."

Azzopardi said that the government had take a decision to remove the eyesore constituted by the derelict structures of the Mare d'Oro restaurant. "The only way to remove that eyesore and stop any future development from taking place was by expropriating it. And the only way we could expropriate the land was by offering compensation to the owners with either money, or land which had a similar value," Azzopardi said.

He also specified that the initiative to reclaim Fekruna Bay for the public was initiated by another ministry.

Azzopardi acknowledged that the land had been valued on the potential development that was allowable under local plans, that were in fact penned and sanctioned under successive Nationalist administrations.

It was two awkward planning decisions taken by past Nationalist administrations in 1988 and 2006 that raised the stakes in favour of the developer in his bid for compensation, after the second Gonzi administration decided to reclaim the bay.

It was these planning decisions that increased the value of the land and bolstered the owners' compensation claim.

Raymond Vella had bought a substantial part of the land in Fekruna from Cerkes Limited in 1987, while another part was leased to it from the government in 1993 and redeemed in 2007.

The fate of Fekruna Bay was effectively sealed in 1988, when the area that included Vella's lido was earmarked for "villa development" in the 1988 temporary provision scheme, issued by then planning minister Michael Falzon.

The lido was then a site for numerous protests by residents and Green Party Alternattiva Demokratika, who demanded free public access to Fekruna Bay in the 1990s. Subsequently, the most ecologically sensitive area was scheduled by the Planning Authority in June 1996.

The PA consequently refused an application by Vella to build two villas in the bay in 1998. Another application for a diving centre in 2003 was then refused by MEPA's development control committee. And that same year, Vella asked for permission to demolish the restaurant and build residential units. The application was left pending and was never approved.

Not exactly protected

The North West Local Plan, published in 2001, listed Fekruna Bay as a protected site and redefined the development boundary set in 1988 to exclude Fekruna Bay from any future development.

But Vella instituted proceedings in the Constitutional Court for compensation and MEPA shelved its decision to exclude the site from development zones.

And instead of correcting the 1988 mistake, which effectively inserted the site in development zones, the 2006 local plans earmarked the area for possible development.

The local plan approved by minister George Pullicino permitted the site to have a food and drink outlet, beach amenities and a retail outlet, as well as residential development limited to 30% of the total floor space on site, while retaining public access to the coast.

The local plan claimed its policy aims was to ensure that any future development "retains the primary use of a leisure coastal facility" but that even some residential units could be accepted if separated from the leisure uses.

Vella's application to develop the site however remained pending for the next years.

Then in 2008, elected on a platform to restrain over-development, the Gonzi administration was less keen on alienating residents in the area by allowing any further development on this site.

So in November 2010, MEPA issued an enforcement order on the derelict site of the Mare D'Oro restaurant in the picturesque Fekruna Bay in St Paul's Bay.

On 4 March the expropriation of the land for a "public purpose" was announced in the government gazette. An agreement giving compensation to the owners was signed a day later. Works on the demolition of the restaurant started immediately and were reported on the Times of Malta on polling day.

In October 2013, the newly elected Labour government presented plans for an upgrade of the area - covering 2,750 square metres of land. The aim of the project now is to upgrade the area to open it up to the public after the demolition of the Fekruna restaurant, which took place some months ago. The project includes a belvedere, a soft landscaped area, and timber benches, the planting of tamarisk trees and a concrete deck.