The db Group says it is “in the clear” after a National Audit Office report found that the price it is paying for the former ITS site in Paceville is in line with market prices.
Earlier this week, the NAO questioned the "regularity" of the transfer with regard to the role of state entities, but said the price being paid by the db Group after the project was downscaled was in line with market prices.
In a statement yesterday, db Group said the details of the report are still being reviewed by the db Group’s core executive team.
It noted, however, that “the price paid by DB San Gorg Property Ltd is consonant to the market valuation carried by the Auditor General as part of its terms of reference.”
The Group also said that “no allegations of whatsoever nature are levelled against the Group in its dealings with the Government appointed negotiation team.”
It welcomed the publication of the report, “as it brings to an end the various unfounded and at times malicious allegations against the Group regarding the price it paid for the concession of the land in question.”
With regard to government, the NAO said it had been unable to establish which ministry had taken the decision to dispose of the site.
It also found that Projects Malta had intentionally classified the transfer as a concession but failed to obtain the authorisation of the Department of Contracts prior to the publication of the RfP.
In February 2016, the Seabank Consortium, the sole bidder, was nominated the preferred proponent with its €17,000,000 bid. Negotiations ended in January 2017, with Cabinet endorsing the €56,000,000 value established by Deloitte who assisted Government in this respect.
On 1 February 2017, the Commissioner of Land and the dbSG, the company formed by the Consortium, entered into a deed for 99 years.
Although the Planning Authority approved the application by the dbSG in September 2018, the Court of Appeal deemed the permit null in June 2019.
In July 2019, the dbSG submitted a fresh application for excavation works while the original application was still active.
The National Audit Office (NAO) was requested to review this disposal by the Public Accounts Committee.
The NAO said that the application for development submitted and approved in 2018 represented a significantly downscaled project, with one residential tower instead of two and a reduction in the hotel element.
“In consideration of these revisions, the NAO established a land value of €45,000,000. The Office’s valuation of €45,000,000 corresponded with the valuation that was to be derived through the application of the parameters stipulated in the deed. The reduction in value was mainly attributable to the reduced extent of development and a substantial increase in development costs between 2016 and 2018.”