Fortina says it would have paid just €4.7m for Sliema land use waiver today

Fortina Group has claimed that it was "significantly disadvantaged" and paid millions more than it would have today in a 2019 deal to allow it to build apartments and shops in Sliema. 

The company said in a statement that an "expert technical analysis" it conducted concluded that the €8.1 million fee it paid the government "exceeded any reasonable quantification of fair value and compensation." 

The National Audit Office concluded last month that Fortina significantly underpaid for the waiver and that a valuation report which set an €18 million price on the waiver was "suppressed" by then-Lands Authority chair Lino Farrugia Sacco. 

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.

Deputy Prime Minister Ian Borg, who was Lands minister at the time, has since vowed to "recoup every cent" owed to the public from the deal.  

But Fortina insisted on Monday that it would have paid a maximum of €4.7 million under today's valuation rules. It said it has submitted its evaluators' report to a parliamentary committee assessing the NAO report. 

The group said its comprehensive review of the National Audit Office report found numerous discrepancies in the valuations made.

"After adjusting for these flaws, it is evident that even before taking into account the unrealistic sales price values assumed in the NAO valuation, the maximum fair value would at best range between €3.5 to €7.4 million," the Fortina Group said.

“We have also tested this for fair value against the new legal framework regulating condition waivers which yielded an astounding result – the bill would have been €3.4 million less than what we paid. If €4.7 million constitutes fair value under today's transparent standards, why is €8.1 million in 2019 not considered excessive? We paid significantly more than current fair value standards. Not only did we not benefit from an advantageous valuation, but we were significantly disadvantaged.” 

Group says NAO report was 'flawed'

The group pointed to 'material errors, methodological flaws, and internal inconsistencies' within the valuation exercises referenced in the NAO Report, which, it said, resulted in an artificial inflation of the purported fair value for the waiver of restrictive conditions on the land.

The NAO valuation, it said, demonstrated a fundamentally flawed approach through multiple references to methodologies focused on maximising potential value. It resulted in the systematic adoption of assumptions and considerations that artificially inflated values while failing to apply appropriate deductions that should have been properly made. 

It said its technical advisers corrected multiple deficiencies, including rebasing the Auditor’s and NAO’s calculations to 2017 prices, which was the date when the application to lift the restrictions was made and the basis of the valuation prepared by the Lands Authority-appointed architects. 

It pointed out that contrary to standard practice and Lands Authority requirements, the architects’ and auditors’ valuations only deducted the ‘deemed air space value’ instead of the site’s fair in-use market value. 

"The auditor effectively understated the fair hotel value by €13.4 million since the deduction should have been based on their computed value of €143,000 per hotel room," it said.  

It also referred to omitted sales tax deductions in the NAO workings and said this omission overstated the NAO-deemed compensation by €6.084 million at 2019 prices.

The Fortina Group said that from its experts’ findings, it appeared that neither the Auditor Valuation nor the NAO valuation methodologies conformed to the requirements of the Government Lands Act.  

It said it conducted a separate valuation using the guidelines under Legal Notice 196 of 2024 and LN 75 of 2025, which regulate the revocation or waiver of conditions on property transferred by government, the Lands Authority, or ecclesiastical entities. This legislative framework reduced subjective valuations and provided transparent, consistent assessment criteria, it said.

"Under the current 2025 legislative framework, calculations by a leading architectural firm demonstrate Fortina would pay a maximum of €4.7 million under today's valuation rules – €3.4 million less than the amount agreed."

"Fortina does not contend that these rules, which came into force in 2024, ought to have been applied but it is simply testing and benchmarking valuations against these rules with a view to shedding light on what constitutes fair value," it said.

The group said it has asked the parliamentary committee to give proper consideration to these technical findings in any reassessment of appropriate compensation amounts. 

The review was carried out by lawyers Camilleri Preziosi, the architect was Edwin Mintoff and the financial expert Raphael Aloisio.