A valuation carried out by three architects to establish how much the owners of the Fortina Hotel site had to pay to turn once public land into freehold was changed following instructions by the Lands Authority, documents obtained by Times of Malta show.

The Fortina had bought the land from the government nearly three decades ago on condition it developed it only for tourism purposes, but the government is now seeking Parliament approval to allow the company to also build apartments, shops and offices on site.

Sources at the Lands Authority said the original valuation made by DHI Periti – a firm commissioned by the authority – established a much higher price than the €8.1 million the government is now asking Fortina to pay.

The documents show the architects were told to amend their original report but when asked for a reason, a spokesman for the Lands Authority did not reply by the time of writing.

Neither did he reply to questions to confirm that the Lands Authority had ordered a third valuation by auditing firm Grant Thornton, which was never presented to the board of governors or to the government.

Transport Minister Ian Borg, who is expected to present a motion in Parliament on Wednesday to approve the deal, put the onus on the authority.

“The minister received a communication from the Lands Authority chairman, Lino Farrugia Sacco, in which he confirmed the latest valuation,” a spokeswoman for the minister said.

“The chairman and his board never expressed a contrary position or asked the government to intervene. The minister believes that any technical issues were already dealt with by the authority.”

Times of Malta is informed that the Lands Authority board never endorsed the valuation but only noted the architects’ reports and sent them to the minister for his final decision.

Chairman and board never expressed a contrary position

Asked whether he endorsed any of the valuations, Dr Farrugia Sacco did not reply.

Last week, during a preliminary debate in Parliament, Opposition MP Ryan Callus, a member of the authority board, declared that the board did not endorse any valuations but only passed the relative files to the minister.

Warnings ignored

The Sunday Times of Malta reported the government ignored warnings in internal Lands Authority documents stating that the €8.1 million valuation was made only on one of four waivers asked by the Fortina owners. In 2017, the Zammit Tabonas, owners of the Fortina Hotel, asked the government to release several restrictions on some 2,000 square metres of land, previously sold to them on condition that it was only to be used for a hotel extension.

The Zammit Tabonas entered into a multi million-euro promise-of-sale agreement with gaming giant BET365 for a still-to-be-built office block on site.

In compensation for the lifting of restrictive clauses, the government is now asking Fortina to pay €8.1 million ‒ €1 million upon the signing of the deed and the rest, €7.1 million, in 10 years’ time.

On the other hand, the Fortina Group said it is being made to pay a hefty compensation price for what is essentially a “small landlocked” portion of land.

They insist that a fair price would be less than €3 million as established by auditing firm Deloitte, commissioned by them. 

Questions sent to the Fortina Group were not answered by the time of writing.

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