The Malta Independent 21 October 2019, Monday

23 years of interest payments bring Borg Olivier expropriation’s total value up to €6.2m

Sunday, 14 February 2016, 10:00 Last update: about 5 years ago

The Commissioner for Lands is to appeal against last month's Land Arbitration Board ruling that awarded the Borg Olivier family over €2.2 million, plus a considerable amount of interest, in compensation for land expropriated in 1993 for the construction of the national pool in Gzira, this newspaper is informed.

This newspaper had reported last month how the land was expropriated by the government of the time after the complex had been fully built and inaugurated - a situation that helped in no small way, along with other factors, to increase the value of the land from just over €20,000 - originally offered by the Commissioner for Lands - to over €2.2 million.

In an apparent reversal of the normal practice, the land had been expropriated only after the national pool complex had been opened. The exact facts behind the expropriation process at the time are still to be established. 

This and other factors meant that the tenement was considered by the Board to have been developable land at the time of its actual expropriation, as opposed to its previous designation as agricultural land as argued by the Commissioner for Lands.

Given the discrepancy between the €20,000 the Commissioner for Lands had originally wanted to pay for the land and the €2.2 million awarded by the Board the Commissioner's appeal appears to be only natural.

It is further understood that the Borg Olivier family will now file an appeal of its own, since the government has done so, considering the fact that architects in 2003 had valued the land at €5.7 million.

In its 27 January ruling on the case, the Land Arbitration Board awarded the family the €2.2 million in compensation, as well as interest payable on that amount as from 8 May 1993, the date on which the national pool complex had been inaugurated.

The legally-established formula for calculating the compound interest rate applicable in such cases renders a total interest payment of close to €4 million.

As such, the total amount awarded to the Borg Olivier family by way of the ruling stands at €6.2 million.

Build first, expropriate later

The facts established by the Board and referred to in the ruling are that the tal-Qroqq National Pool complex, which included the 4,921 square metres of land owned by the Borg Oliviers, had been officially opened on 8 May 1993.

But it was two months later, on 13 July 1993, that the government published its intention to expropriate the land in question.

This situation, the Board heard in submissions from its experts, meant that at the time of the announced intention to expropriate, the whole parcel land was no longer agricultural land, the value of which would have been €20,380.

Added to that, the Board also favourably considered arguments that three-quarters of the land in question was to have been considered as developable land, even before the 1993 opening, and that the land in question had frontage on three roads, both of which meet the criteria for establishing a property as a developable one.

Some 10 years after the inauguration, on 14 February 2003, the Commissioner for Lands had informed the Borg Oliviers that the competent authorities were ready to pay up for the land expropriated back in 1993, and had set a value on it of €20,387, an offer the Borg Oliviers flatly refused, making a counter offer of €2,282,785.

During proceedings, the Board's experts had established the value of the land in 2003 at €5.7 million. While the Board had observed that this should be the correct amount to be awarded, it was constrained by 2004 legislation which established that the level of compensation to be awarded in such cases cannot exceed the maximum amount proposed by one of the case's parties, in this case the €2.2 million proposed by the Borg Olivier family in 2003.


 

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