The Corinthia Group has agreed to “most” of the new parameters that the government presented to them, however any future deal depends on the outcome of a new valuation process for the land in St George’s Bay. The valuation is being carried out by Colliers International; a process which has no set deadline, Tourism Minister Konrad Mizzi told The Malta Independent on Tuesday.
The initial deal would have seen Corinthia Group change the terms of an emphyteusis, on land which they have rights to in St. George’s Bay on a 99-year lease. The change would have allowed the Corinthia Group to develop residential apartments, rather than just use the land for tourism purposes, for just a €17 million payment. This idea however was taken back to drawing board last February after extensive pressure from all fields.
Asked by this newsroom for information as to the current stage of the negotiations on the deal, Mizzi said that the government had sat down with Corinthia to discuss new parameters which the government had received feedback on from various stakeholders.
He said that Corinthia had agreed to “most” of the new parameters, but that before discussions proceeded further, a new valuation based on these new parameters had to be carried out.
The government, Mizzi said, had appointed Colliers International to carry out this valuation and that once this is completed, they would sit down once again with Corinthia and advise them of the new valuation as per the new parameters.
Asked whether the government had stipulated a timeframe for this to be carried out, Mizzi said that the government is not “pressing” Colliers on the time the process takes as they would like them to do good work.
“Apart from the office legwork, they will also be coming on site to do some work and familiarise themselves with the location and the local market”, Mizzi said.
Asked whether this valuation would be replacing the Deloitte formula which was previously used, and which was the source of much controversy, Mizzi reiterated that the valuations are being carried out on different parameters, and that Colliers’s valuation is based on the changes in principles that the government had made to the deal.
The Deloitte formula had drawn much controversy, with many arguing that the land had been grossly undervalued. The same formula was used to value the tract of land granted to db group for their mega project in the same area.
Asked whether the government’s decision to use a new valuation formula would affect matters in the case of db Group’s site and in the White Rocks Project, Mizzi replied that in the case of db Group, the process had already been concluded and that in the case of White Rocks it is not something which falls under the tourism ministry, but under the privatisation unit.
The Privatisation Unit is part of the Ministry for Economy, Investment and Small Businesses which is headed by Chris Cardona.
That project has also seen the land’s valuation come under the microscope, but this time because the government could not reach an agreement with the White Rocks Development Consortium for the land’s sale. The Malta Independent on Sunday in fact last February reported that the consortium’s offer was five times below the government’s valuation of the land, which stood at €120 million.