Corinthia scandal: PN wants hotel chain to pay full amount in advance, but remains silent

The Opposition wants to see a change in the payment terms which the government conceded to the Corinthia Group over the conversion of public land, originally destined for tourism purposes and now to be turned into a luxury villa complex.

Answering questions from The Shift following its investigation last week that showed that Corinthia will be forking out only €1.3 million of the agreed €10.3 million fee, the PN insisted that while public land should be disposed of only if necessary, this should at least be done at a “fair price”.

Pressed for a position on the latest revelations, the Opposition leader said that the agreed full payment of €10.3 million “should be paid upfront” without going into further details.

According to the draft deed agreed between Economy Minister Silvio Schembri and Corinthia chairman Alfred Pisani, revealed by The Shift, the hotel chain will be paying only €1.3 million upon the signing of the deed, with the rest (€9 million), to be paid in instalments over a ten-year period and forked out in small tranches of €360,000 each by the future buyers of the exclusive villas.

The terms are similar to a deal the same government struck with Silvio Debono’s DB Group for public land at St George’s Bay. Then, the PN had challenged the deal, asking the National Audit Office for an investigation that resulted in a report by the Auditor General slamming the deal.

The Pisanis will only be contributing €1.3 million to the public coffer – less than half the estimated price of a single villa.

While the PN has so far refrained from issuing any public statement on the scandalous deal reached between the government and Corinthia Group, none of its MPs or officials, except for Adrian Delia, has come out condemning the deal.

In a reaction on his social media page, the former leader of the opposition slammed the payment terms reached over the conversion of part of public land given to Corinthia – the size of four football grounds – to be turned into a massive villa complex in an ecologically and rural sensitive area.

Adrian Delia called the Schembri-Pisani deal “unacceptable”.

His position contrasts with the muted reaction from the party. The same PN had opposed a similar deal for Corinthia at St George’s Bay when the Pisani-owned chain made a similar attempt to turn part of its properties in St George’s Bay from hotels into luxury residential apartments.

At the time, Alfred Pisani had concluded the preliminary deal with then Prime Minister Joseph Muscat so that land estimated to cost €700 million would be turned into two blocks of luxury apartments in compensation for just €17 million, with generous payment terms.

When the agreement was brought to its final parliamentary approval, the PN had strongly opposed the deal, which was then scrapped.

This time, when the latest Corinthia land grab was presented to parliament, the PN members of the National Audit Accounts Committee did not attend, saying there was no urgency for such a meeting to be held during the summer holidays.

This allowed the government side to approve the new agreement unilaterally in a meeting that lasted some 10 minutes.

Mixed reactions

Independent candidate Arnold Cassola, on the other hand, has called for a formal investigation on the Hal Ferh deal.

Yet lobby groups have remained silent.

While in the case of Silvio Debono’s DB Group deal over the ITS land, some constituted bodies, particularly the MDA, had sounded the alarm, this time round none of them seem to want to rock the boat.

The Malta Hotels and Restaurants Association told The Shift that it will not make any statement as “it does not comment on any commercial agreements conducted between members and other parties.”

The Malta Employers Association and the Chamber for SMEs – the former GRTU – also failed to comment so far on the preferential business deal conceded by Economy Minister Silvio Schembri to Corinthia.

While the Malta Chamber of Commerce did not comment on this deal specifically, it called for more holistic planning in a statement last month:

“The country urgently needs a holistic Master Plan and revised local plans supported with clear policies which do not leave room for abusive exploitation in their interpretation and application. The ad hoc planning approach adopted over the years has uglified Malta, created uncertainty, excessive speculation and a non-level playing field between industry players as well as the general public.”

Project details start emerging

Details of the Hal Ferh development show the full 30,000 square metres of the former public land to be developed as part of the 25-villa complex.

While the 25 villas will have a total built area of 9,000 square metres, thousands of additional square metres will be turned into pools (one for every villa) landscaped patios, outside dining areas and gardens, massively increasing the market value of the villas.

Plans submitted by Martin Xuereb and Associates show that Corinthia has already divided the 30,000 square meters into 25 distinct plots, with an average area of over a tumolo each.

The Environment and Resources Authority has now asked for a full environmental impact assessment for the project.

In the unlikely scenario that the Planning Authority does not give the green light to this project, the government has made sure to even compensate Corinthia the paltry €1.3 million it is paying for the unique site.

Corinthia chairman Alfred Pisani has appointed his youngest son, Marcus, to take charge of the multi-million euro project.