Property transactions involving the government will no longer involve land swaps but instead be solely in cash, Infrastructure Minister Ian Borg has said.

Borg said previous land swaps had been mired in controversy.

“The sale of a palazzo in Old Mint Street in 2015 and the expropriation of land at Fekruna Bay in Xemija in 2012 are just two examples why the government has been adopting this approach for the last three years,” he remarked.

Borg was speaking in parliament on Wednesday during the debate of the financial estimates of the Lands Authority.

He acknowledged that in some cases owners of land transferred to the government 35 years ago were still waiting to be compensated. In turn, this is hindering the owners of houses built on this land from having the legal title on such properties, denying them the chance to acquire full ownership.

These pending cases are estimated to involve hundreds of millions in compensation, and range from small parcels of land worth just €20,000 up to €6 million, Borg said.

Old Mint and Fekruna Bay controversies

The infrastructure minister said he was not willing to consider land swaps as an alternative form of compensation, instead of cash.

Such an option would only be taken up when there is an established property valuation mechanism which would be agreeable to all involved parties.

“Until such a mechanism is there, there will be complaints and suspicions that properties have either been sold for a pittance or at an inflated price,” he said.

In the case of Old Mint Street, known as the Gaffarena scandal, the deal which had been flagged by The Sunday Times of Malta, was rescinded by a court. The move followed an investigation by the National Audit Office which had concluded that there had been collusion between the defunct Government Property Division and the vendor.

Apart from €1.65 million in cash for part ownership of this palazzo, the vendor, Mark Gaffarena had been compensated with parcels of land worth much more than the value stated in the agreement.

Infrastructure and Transport Minister Ian Borg. Photo: Mark Zammit Cordina

In the case of Fekruna Bay, the deal was sealed days before the 2013 general election and involved the transfer of two properties worth €4.3 million as compensation. According to the NAO there had been “serious shortcomings” in the documentation pertaining to the deal.

No government representative on Lands board since January

During the debate, it also transpired that the government is yet to nominate its representative on the board of governors of the Lands Authority, six months after MP Alex Muscat had resigned to take up the post of Parliamentary Secretary for Citizenship.

The matter was raised by Opposition MP Ryan Callus, who had resigned as the Opposition’s representative on this board last November.

He noted that government’s procrastination to nominate a representative vindicated his decision to step down which at the time was harshly criticised by the government.

“I resigned because I did not want to be part of shady deals which were being given the go-ahead by the board despite my warnings,” he remarked.