Former MDA officials among bidders for affordable housing project

Two developers who recently resigned from the Malta Development Association (MDA) were among the bidders for an affordable housing scheme that the MDA claims is unlawful state aid.

Companies linked to former MDA council members Pio Vassallo and Anton Camilleri were officially named as bidders for a project by the Foundation for Affordable Housing to build hundreds of discounted homes.

A third MDA member, Paul Attard, also resigned.

The project has drawn criticism from the MDA for giving developers public land “for free under the pretext of affordable housing”.

A formal complaint by the MDA was filed with the European Commission in March, alleging plans to develop apartment blocks for sale at 30 per cent below the market value amounted to “potential unlawful state aid”. 

A copy of the complaint was published by MaltaToday.

Parliament approved the transfer of public land in Fgura, Marsascala, St Julian’s and Kirkop to the foundation.

The foundation, which is a joint venture between the government and the church, issued four separate tenders last year seeking offers from private companies interested in designing and building the respective sites.

Responding to the claims, the foundation’s CEO Jake Azzopardi said the scheme “conforms fully to European State Aid regulations”. 

For a measure to constitute state aid, there should be evidence of state intervention, such as grants or preferential terms, recipients being granted a selective advantage, distortion of competition and the likelihood of affecting trade between EU states.

Exemptions are granted in specific circumstances and in line with certain policy objectives, the Commission notes on its website.

The MDA letter claimed all four criteria are satisfied by the housing scheme, while pledging to provide “detailed supporting documentation, factual information and market data” to support its claims.  

Rejecting the claims, Azzopardi said the scheme “is providing to a specific target market, ensures that buyers use their property as their primary residence, emanates from a legal entrustment, whilst the transfer of lands controls excessive profit”.  

“All four projects are open to an open public call in line with the rules of fair competition, in which numerous private developers participated”, he said, adding that applications to build the housing projects were in their final evaluation stages and that construction “may start later this year”. 

While the foundation had not yet received official communication from the commission, Azzopardi said it looked forward to sharing with the commission the “economic and social value this initiative will bring”. 

The CEO called the scheme a “great opportunity” to prove that Malta could provide affordable housing, with developers benefitting alongside society.