Parliament yesterday approved a resolution that allows for the absolute sale of public land in Ta' Qali to the US government for the construction of an embassy complex.

The resolution was passed with no one voting against.

Opening the debate, Deputy Prime Minister Tonio Borg outlined the salient details of the contract which will see the American government buying 40 tumoli of land for a total cost of $18.5 million to build an embassy compound. Furthermore, the US government would be paying up to a maximum of $400,000 to the government of Malta for demolition work to remove the existing buildings on the site.

Dr Borg said the government was not the only party interested in selling land to the US government for a new embassy, but a number of private owners had also made their offers.

He said the government had reached a fair price for the land considering the type of development that was being planned and how the site would be used by the American government.

He said the US government's primary choice would have been land in Pembroke, however it was unable to meet the government's asking price which was above the amount budgeted by the Americans.

Dr Borg insisted that the contract stipulates that the Americans cannot use the land for other purposes such as the construction of apartments. If, at some point in the future, the US government no longer needs the land and the buildings there, the contract stipulates that it has to offer the land to the government at the going market price at the time. The deputy prime minister said that if the two governments do not reach an agreement on the price, a board comprising three architects will decide on the final price within two months.

Replying to comments that a foreign country would now own 40 tumoli of land in Malta, Dr Borg said that if the Maltese government had not sold the land, the US government still had the option to purchase the land from third parties.

"There was nothing to stop the US government from purchasing the land from private owners. However, because the sale is being made by the government, the country is adding over Lm6 million to its coffers," Dr Borg said.

He said that a number of theories had surfaced in the media to explain why the US government needed 40 tumoli of land, however the embassy required that amount of land for security purposes.

"The embassy will have more space and facilities but the main concern for the American government is security. The site offers a greater level of security than the present site in Floriana. For example, there will be a buffer zone between the perimeter wall and the embassy itself providing added security not only to the Americans but also to the Maltese who requires services from the embassy."

Dr Borg said the development would generate a number of spin-offs.

"I am informed that the US government will be spending millions of dollars to build the embassy, which will involve local contractors and workers. This, therefore, will pump millions more into local circulation," Dr Borg said.

Labour's spokesman on foreign affairs Leo Brincat said the party's Parliamentary Group agreed with the sale of land to the American government, however he criticised the government for not keeping the Opposition informed about the proceedings well before the contract was discussed in Committee.

Mr Brincat praised the American embassy in Malta for providing the Opposition with all the information it required and for always being ready to discuss and answer the Labour Party's questions. He said the Party was satisfied with the assurances given by the Americans.

Mr Brincat said that when he assessed the contract, he looked at five areas: the price, the location, security issues, the possible loss of recreational areas and whether the embassy would become a military base.

He said that the Ambassador and the charges d'affaires had made it clear that the embassy would not be used as a regional base. Neither would the embassy have a helicopter pad or facilities for light aircraft. He said the Americans also insisted that it was not their intention to turn the embassy into a military base.

The Labour spokesman said the party was satisfied that the price was fair and that the plans would not lead to a reduction of recreational space or encroach on the national park.

Mr Brincat said the only problem with the move to Ta' Qali was the lack of a decent transport system. He also dismissed the concern that the new location would pose a an increased security threat, saying that "if there is something that is a security threat, it is the embassy in Floriana… which is right next to a complex housing commercial and financial Maltese companies employing Maltese workers. In a hypothetical terrorist attack, Maltese interests would be first to suffer."

He also dismissed concerns that the embassy would become a spying outpost.

Summing up, Mr Brincat said he wanted to take the opportunity to encourage the government to focus more on the economic aspect of the relationship between the two countries. He said he believed that the US could help Malta more in a number of areas, and called on the government to intensify its efforts to reach an agreement on double taxation and the waiver of visas.

Winding up the debate, Parliamentary Secretary Tonio Fenech sought to clarify a number of misconceptions that had been raised at committee stage and during yesterday's debate.

He said the government was not selling land that had been earmarked for recreational purposes and denied that it formed part of the master plan for Ta' Qali. Mr Fenech insisted that the land was still in an industrial zone. With regard to the area behind site being sold to the US government, Mr Fenech said there were no plans to build a housing estate there.

"The area is now being classified as a possible residential area. It is up to the government to decide what should be done with the land but no decision has been taken," Mr Fenech said.

Replying to a comment made by Labour MP Dr Joe Brincat that the government was selling cheap and buying expensively, Mr Fenech said it was not possible to compare the sale of the land in Ta' Qali with the purchase of Dar Malta in Brussels.

"Dar Malta was already built and in the heart of Brussels, in an area known as the Golden Mile, and bought for Lm10m. Here, we are selling land that is unbuilt and certainly not in our 'golden mile' area, in Paceville, for example. Yet, we sold it for Lm6m. I think that we got a good price in both cases," Mr Fenech said.

Replying to Mr Leo Brincat's claim that Labour was not informed about what was happening while talks were under way between the two governments, Mr Fenech said there was consensus that the American Ambassador would explain its intentions and requirements to the Opposition – thus avoiding the need to use the Maltese government as a go-between. He insisted the government had never intended to exclude the opposition.

With regard to Mr Brincat's suggestion that the government should boost its efforts to reach an agreement on double taxation and the visa waiver, Mr Fenech said they Maltese government had felt that the process was taking too long. However, after the Prime Minister's meeting with US president George Bush, the issue was put at the top of the agenda.

Mr Fenech said that discussions had resumed at a formal level last month and that the US side had changed its opinion about Malta on a number of points. He said the government was confident that progress was being made.