Corinthia Land Deal Is Back To The Negotiation Table After Developers Bare Their Teeth
The controversial land deal between the government and the Corinthia Group is reportedly back under negotiation after the Malta Developers’ Association threatened to take legal action.
The Times of Malta reported today that the government has received legal advice that the current deal could open itself up to lawsuits from Corinthia’s developer competitors on the grounds that it breaches EU state aid laws.
According to the newspaper’s sources, Tourism Minister Konrad Mizzi, who is leading the negotiations, is standing his ground because he fears the government might otherwise not be able to “honour an unwritten commitment” it has with Corinthia.
In an interview with Lovin Malta that will be aired in the near future, MDA president Sandro Chetcuti said he is confident the government will consider the concerns of developers.
“I have no doubt that the government has taken heed of our complaints and concerns and indeed it has postponed a parliamentary debate on the deal,” he said. “I can’t say what the end result will be but we received legal advice before speaking out [against the deal] and particular investors are also concerned on an individual basis.”
Sandro Chetcuti and Moviment Graffiti activist Andre Callus discuss the Corinthia deal
“I have faith that the government will listen to our concerns and do what it can to mitigate the situation. I want to be clear that we have nothing against the project and that the government has every right to see certain projects through, but things must be carried out properly, fairly and in a manner that doesn’t distort the property market.”
The land in St George’s Bay was leased to the Corinthia Group in the early 1990s at a dirt cheap price, with the government’s logic being that the private sector needed to be incentivised to boost tourism to Malta.
The recently proposed revised deed will lift a waiver that restricts Corinthia to developing buildings that are touristic in nature, a move that will allow the hotel chain to construct luxury residences in one of the most sought-out areas on the island and sell the on a freehold basis.
Corinthia’s logic for the lifting of this waiver is that it needs to be incentivised to construct a new six-star hotel, that it claims will attract a new class of wealthy tourist to Malta, which will in turn be beneficial to the economy.
However, the Malta Developers’ Association has warned that the proposed price tag for the lifting of this waiver – €51.4 million, out of which only €17 million will be a direct premium – is way below market value and therefore discriminatory towards other developers who want to sell real estate in the area.
“Land is our version of oil wells, our only natural resource, and I wish the government starts taking more of an interest in acquiring better conditions when negotiating public land,” Chetucti said. “Our members all take out loans and purchase property at market prices and I don’t think it’s a good thing if the governments sends out a message that private land is more expensive than public land.”
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