All Fortina valuations scrapped, new one is ongoing and will be published by May

The Lands Authority has scrapped all existing valuations of the Fortina land deal and ordered a fresh assessment, a move that effectively sidelines a damning National Audit Office (NAO) report which found the public was short-changed by millions of euros.

The decision, announced during a heated sitting of the parliamentary Audit Committee, means the government is effectively hitting the reset button on a saga that has already seen six different price tags for the Sliema seafront site.

Parliament voted in July 2019 to allow Fortina to use land in Sliema to develop apartments and commercial activities against a payment of €8.1 million, based on a valuation by the Lands Authority itself. The land was originally restricted to use for tourism-related development. The Auditor General’s own assessment placed the value at €21 million, suggesting a massive shortfall for the public purse.

Adding to the confusion is a "hidden" valuation by Grant Thornton, which estimated the value at €18.3 million years ago but was never acted upon.

Conversely, the Fortina Group has long maintained that it actually overpaid, citing their own valuations between €2.7 million and €4.7 million. 

Lands Authority CEO Robert Vella told MPs on Tuesday that the valuations so far —including the one used by the Auditor General to flag a €12.9 million loss to the state—were technically flawed and illegal.

"Ultimately we concluded that we cannot consider these reports anymore because they're not lawful and not technically valid," he said.

"We're starting from scratch. We have reassigned the task to the architects and we paired them with an accounting firm to advise them on the commercial aspects of the project. We will deliver the report by mid-May."

He said this means even the Lands Authority's first valuation has been scrapped.

The Authority has now commissioned a brand-new assessment to be conducted by the same architects who handled the previous deal, and whose work led to the €8.1 million price tag.

Flawed methodology

The Lands Authority’s CEO argued that the NAO’s valuation did not follow the specific requirements of the Lands Authority Act, which mandates that property assessments exceeding €400,000 must be signed off by three architects.

The NAO’s report relied on a single expert, leading the Authority to claim it cannot legally rely on that figure.

The move triggered fire from the Opposition.

PN MP Darren Carabott suggested that the Lands Authority's report that arrived to this conclusion should be handed over to the NAO to be analysed.

Auditor General Charles Deguara said several aspects of Vella's presentation to the committee "were news" to him, and that this was the first time he was learning about them.

He also said his office was open for scrutiny as long as it was a fair process.

"We have no problem acknowledging where we were right and where we were wrong," he told MPs.

"These new things we learned today are shocking because they put the credibility of our office at stake. And our credibility is something that I've taken very seriously for as long as I've been in office.

"We will immediately look into our process because if the issues raised by Vella are true, they are very serious indeed. And I will have no problem acknowledging our shortcomings if there were any."

The Auditor General’s investigation last year alleged that the €18.3 million valuation was kept hidden to ensure the developer paid the much lower figure of €8.1 million.