There is no way that the former Lowenbrau factory land (renamed Landmark) could be valued at €7,838,515 in 2012, as suggested by Minister for Justice and Culture Owen Bonnici.

Speaking exclusively to The Malta Independent Professor Alex Torpiano, Dean of the Faculty of Built Environment at the University of Malta and Chair of the special committee entrusted to evaluate the land back in 2012 said that “one cannot value something as freehold, when it had already been given on a perpetual emphyteusis, and redeemed accordingly to boot.”

Professor Torpiano was replying to questions sent by this newsroom in an effort to determine whether Minister Bonnici’s claim that business magnate Zaren Vassallo received land worth nearly €8 million for only €706,400. Vassallo Group paid €8 million for the land to Marsovin on condition that the land is sold freehold without conditions of use.

Professor Torpiano reiterated that, in 2012, the committee, which he chaired, was asked to estimate the fair market value of the perpetual emphyteusis as in 1990, without any conditions limiting its use, that is, as a freehold commercial property.

He explained that in 1990, ca. 21,000 sq.m. of land at Ta’ L-Istabal, Qormi were given on a perpetual emphyteutical grant, subject to an annual and perpetual ground-rent of Lm10,000 (ten thousand Malta Liri), (equivalent to €23293.73), and subject to a number of conditions, amongst which, that the site be used for “industrial purposes specifically for the production of alcoholic and non-alcoholic beverages”.

In 2009, the emphyteuta, LBM Breweries Ltd., redeemed the ground-rent, in accordance with the Law, for €465,875.00.

“In other words, in 2009, the 21,000 sq.m. of land became the property of LBM Breweries Ltd., for €465,875.00,” says Professor Torpiano.

“There is no way, therefore, that the land could be valued at €7,838,515 in 2012. The advice to the NAO is, unfortunately, completely wrong in this regard. One cannot value something as freehold, when it had already been given on a perpetual emphyteusis, and redeemed accordingly to boot,” he said.

Professor Torpiano added that, “it is true that, in 2009, a mistake was made during the redemption process, because the condition limiting the type of industrial use allowed, was removed.”

The nature of perpetual emphyteusis means that, effectively, in 1990, the land so burdened was valued at €465,875.00. Professor Torpiano told this newsroom that, “if this conditiondid not exist, in 1990, market value would have been €706,400. The difference in value was, therefore, the value of the condition burdening the land in 1990.” This condition was deemed to have added ca. 50% to the value of the redemption.

“If one were to bring this difference in value in 1990 to 2009, when the emphyteusis was redeemed, using published rates of inflation, the value of the land in question would have increased to ca. €865,466.50, rather than €706,400,” claims Professor Torpiano who made this evaluation on this newspaper’s request.

“This may not seem a lot for 20,000 sq.m., but the bulk of the price comes obviously from the nature of the emphyteutical grant of the land, rather than on the condition of which type of industrial process was allowed,” he explained.

Speaking to The Malta Independent on Sunday, former Minister John Dalli pointed that when he pushed for the land to be given to Marsovin in 1990 it was fine for 20,000sq.m of land to be sold by government for €465,875, as long as the building was only used to produce beverages. 

On his part, Minister Owen Bonnici is claiming that it is not OK for the land to be sold for €706,400, if the building was used to produce other products, however, when adopting the same yard stick based on the original evaluations it clearly shows that the difference would have been closer to €100,000 but not in the millions as suggested by Minister Bonnici who also implied that Vassallo Group where given the land in exchange for donations to the PN.

“If there is a problem, it lies in the laws regulating the redemption of emphyteusis of government land, not in the evaluation method used,” says Professor Torpiano.