Government offers Corinthia Group Ghajn Tuffieha site for €10.3 million

After more than two years of negotiations between the Lands Authority and the Corinthia Group over the development of public land in the idyllic location of Ghajn Tuffieha, a new €10.3 million deal has just been approved by a parliamentary committee in just 12 minutes.

During a meeting of the National Audit Office Accounts Committee yesterday, called at the eleventh hour while Parliament is still officially in recess, a motion put forward by Economy Minister Silvio Schembri was approved by the three sitting government members.

Opposition representatives boycotted the meeting, saying they were given no opportunity to study the details of the deal. They claimed that “there was no urgency” in approving this motion while the house of representatives was still on holiday.

Sketchy details of the agreement show that to change the use of some 30,000 square metres of public land, forming part of the former Hal Ferh tourist complex, the Government has asked Corithia to fork out €10.3 million or €343 per square metre. The deal also stipulates that Corinthia can only build a gross floor area of 9,000 square metres with the rest being used for landscaping and outdoor space.

Industry sources told The Shift that while the price requested by the government is well below current market prices, the compensation sought by the government is still considered high when compared to previous projects in which the government sold public land for much lower prices.

“This is quite a fair deal in the context of how the same government disposed of much more valuable public land like the one formerly occupied by the ITS in St Julian’s,” the sources said.

“The Corinthia Group already had the title on this land and so the compensation of €10.3 million is quite fair. At the same time, it is still not on in principle that the government continues to dish out public land to businesses to make more millions. The government should not be involved in speculation of public land and this is not its role.”

It is not yet known whether the Corinthia Group has accepted to pay this price and what payment conditions are being offered.

Sources said that it will make a huge difference if the Corinthia Group has to hand over the money at one go, or whether terms have been agreed to stagger this payment over several years.

“Comparisons are odious, but if you see how the government arranged with the DB Group to stagger some €10 million in minuscule payments over many years with regards to the ITS project, we have yet to discover. What is sure is that the ITS deal was a massive scandal”.

Plans before deal

The international luxury chain of hotels, mostly owned by the Pisani family, has already published plans to transform the former Hal Ferh tourist complex into a luxury resort, comprising some 9,000 square metres of residential space for sale.

However, both the Group and the Lands Authority have remained silent on the compensation element, considered crucial for this investment to be implemented, for almost two years.

According to a 2009 deed, as the public land in question is to be used for a different purpose to the one originally envisaged – tourism – Corinthia must compensate the public following an evaluation made by the Lands Authority architects.

The Shift is informed that the discussions with the Corinthia Group were handled personally by the CEO, Robert Vella, on the strict instructions of Prime Minister Robert Abela.

The change of use permitted to the Corinthia Group has markedly boosted the value of the land of the former Hal Ferh complex, thereby allowing the private hotel chain to make significant profits from a venture developed on public land.

No plans yet at the Planning Authority

Last July, through a company announcement, the publicly-listed Corinthia Group announced that it had formally submitted plans to demolish the whole Hal Ferh complex, occupying an area the size of some 12 grounds of football, and build a luxury resort.

In an interview given recently, Marcus Pisani – the Corinthia chairman’s son who is responsible for the project – gave more details of his group’s intentions and described the future development as “a dream in the making”.

However, while giving details of the project, including a hotel with 162 large guestrooms with water suites, wellness centres and international restaurants as well as the 25 luxury residential villas, no information was provided about how much the company will be paying the public for this land.

Meanwhile, despite the company announcement last July, the Planning Authority has still not started considering the project as no plans have been submitted.

According to the PA website, the Corinthia’s Hal Ferh plans (PA5420/21) are still not fully submitted, and details can only be made available to the public when complete.

Public land for speculation

This is not the first time that the Corinthia hotel group has attempted to develop residential units on public land given to them for tourism purposes.

After losing out in 2015 in the bid to acquire the ITS land in Pembroke, awarded instead to the DB Group at a controversially low cost, the Pisanis were forced to withdraw their plans to build luxury flats on public land currently occupied by one of their three hotels on the St George’s peninsula.

Public uproar, a threat of state aid procedures and opposition by the Nationalist Party at the time had forced Chairman Alfred Pisani to put his plans on hold. These have since lain dormant, but have not been withdrawn.

Corinthia’s negotiations at the time were being held with disgraced former Minister Konrad Mizzi.