Joe Gasan found his family business, the Gasan Group of companies, drawn into various controversies, such as on the Townsquare and Mrieħel projects and Electrogas. In a rare interview, he defends his position.

Martin Scicluna has described you and other developers involved in Townsquare and Mrieħel as “people who appear to have lost all sense of moral corporate responsibility in their efforts to become even richer than they are already”. Fr Joe Borg referred to the developers of Mrieħel and Tigné as “the big-moneyed bullies who are ruling the roost and making millions, thanks to pre-electoral shady deals”. Do you agree with this description?

Absolutely not. I am very upset that people should even think this way. We are not a group that started working yesterday. We have been in business in Malta for over 90 years. We are investors who are in business for the long term and have always done things correctly. We do not make pre-electoral deals – we never have and never will.

All these projects are ones with a long history, and we have been working on them or projects like them for decades. The Townsquare project has spanned over 50 years. It is very unfortunate that the timing is such that a number of projects in which we are involved suddenly became controversial. Perhaps this is because people overlook the fact that the Gasan Group always has a number of long-term projects on the go at any particular point in time. This is not something we have been criticised on before.

Now we are being accused of pre-electoral deals, of being greedy, of being rich.

We have a very clear conscience, we have employed a lot of people – some of them for their entire lives – and over the years have been an important player in the Maltese economy. We paid a lot of tax, reinvesting our profits. Of course, we aim to make a profit! Without that we cannot be in business. We have always had a good reputation, and I am upset that good and serious people like the ones you just mentioned are suddenly and without thought tarnishing our name. It is not fair.

There is a difference between making a profit and putting your profits ahead of the interests of the man on the street. Isn’t that the issue?

That is the issue some  are trying to portray, but I do not see it that way at all. I do not believe we are  doing anything against the interests of the man on the street. In each case, they are business investments. And some of them started many years ago.

If we don’t build the tower, you think no one else will?

Let us start with Townsquare… Why has the reaction to Townsquare been so fierce? Would it have been as bad had Townsquare opted for 26 blocks of nine storeys each? In other words, is it about Big Money riding roughshod over the Man in the Street or the high-rise changing the skyline of Sliema…?

I think a lot of people do not like the idea of high-rises, and of course they are entitled to their opinion.

So don’t build them. Why risk your reputation? Just build 26 blocks…

Are you serious? My father bought the perpetual emphyteusis of much of the Townsquare site in 1954 from the Franciscan friars on which the Union Club had a lease until 2000. In the early 1990s, I reached an agreement with the Union Club to build them premises on 2.5 tumoli on perpetual emphyteusis. Before I and my sisters could go into such an expensive transaction, we applied and got a permit to develop the rest of the site in line with the current buildings’ policies.

We later bought Villa Drago from Angelo Xuereb, which enabled us to target a bigger and more attractive project – as well as giving us access to Tower Road. We have been talking to the planning authority for years. Our initial plans were blocks similar to the others in Sliema at the time, taking up 85 per cent of the plot. As long ago as 1997, the PAPB, as the PA then was, suggested that we build a tower which would take up less of the plot’s footprint.

So you are saying that the idea of a tower actually came from the PAPB, even though there was no high-rise policy at the time?

There was no high-rise policy at the time that the 14-storey Preluna, when the highest building was five storeys, or when the 23-storey Portomaso was built, when the highest building was nine storeys…

But yes, the director general of the PAPB suggested the tower. We kept coming back and forth with different suggestions, and as recently as five years ago, we had a variation of the project for a shopping centre with underlying car parks, offices and blocks of various heights, culminating in two towers of 20 storeys each, in line with Fort Cambridge.

Since the floor-area ratio was introduced by the Planning Authority, instead of building 85 per cent of the footprint, we are proposing to build only 38 per cent of the plot, with an attractive piazza – bigger than Dingli Circus! And then have a beautiful tower with an eight-storey arch through it and a road all around it. All the proposed development plans are in line with the regulations.

We have carried out numerous studies and assessments, and made numerous adjustments to the plans. But all of a sudden the objections started…

And as you know we are now facing appeals.

Again, I ask you: why risk your reputation for the sake of a tower? Why not just build 26 blocks of nine storeys each? Why get the blame for changing the skyline of Sliema?

Are you quite sure that everyone agrees with this approach? And if we don’t build the tower, you think no one else will? Metropolis already has a permit for 32 storeys, and the fact that they have not built it yet is neither here or there… And you saw the master plan for Paceville issued last week, which has 18 towers anticipated. Why are we being singled out?

If the authorities say we can build two towers of 20 storeys each that everyone would be happy with, then so be it. That is what we will do. But then we would not be able to have a road going around the complex. And we would have to build up more than 38 per cent of the footprint. We still honestly believe in what we have proposed.

We are taking a bigger risk with the tower, as you cannot build it in phases, a few blocks at a time: you have to build it all at once and spend all the money before you can start selling, as we would never consider doing things like selling on plan before we have the permit in hand… It will take much longer and involve much higher capital outlay.

We calculate that we would make higher profits if we built 26 blocks of nine storeys each – with less risk and without tying up all our money until the project is completed. Our target is not to make more profits but to create something we will be proud of.

We are going to create an open-air shopping mall with restaurants and coffee shops, as well as a garden. It would be a pity to lose these.

It has nothing to do with luck or pre-electoral deals

Mrieħel was not included in the high-rise policy when the policy was submitted for public consultation by what was then the PA but was only added later on direct instructions from the government. Did you influence that decision?

No [bangs table]. No. Absolutely not. We were among the first people to recognise Mrieħel as an ideal location for offices. In 1998, when there was only the MFSA here, I bought five tumoli of land for the Gasan Group head office, because we had outgrown our site in Gżira.

In 2008, we felt there was more quality office space needed in Malta, and we joined the Tumas Group to acquire by tender 10 tumoli immediately adjacent to where our head office is from the government by tender – paying 10 per cent more than the only other bidder. In the event, we were proved right and the demand for offices started to grow four years ago.

A number of years back we had applied and got a permit for just half of the site, since we planned to build in phases. It would have represented much less risk for us than the towers that we are now proposing, which need to be built as a single development.

Farsons have a business centre too – but only a few storeys high. Why did you decide to go for a high-rise, which will completely change the nature of Mrieħel?

In my opinion – backed by local and foreign experts – the project (and it would be good for people to have a good look at it before they pass judgement) is a very, very attractive one. It will take up less than half the footprint and will include a three-floor-high podium with restaurants, a daycare facility, shops and outlets, and four interlinked towers of 15, 17, 18 and 19 floors. And we have not gone for everything that we could have: it is actually almost 5,000 square metres less than the floor-area ratio policy allows.

The main thing that is being criticised is the fact that Mrieħel was not one of the original high-rise areas proposed. I assure you we had nothing to do with the decision. At the same time, I believe it made a lot of sense: numerous entities have been talking about making the area a business district. And if you do that, why limit it to five storeys? It is already an industrial/commercial area, and many would argue that it is in need of rehabilitation. By going high-rise, we are not disturbing anyone.

The Archbishop in The Malta Independent said: “Once they ruin our landscapes and turn our cityscapes into concrete jungles, they themselves and their children and grandchildren will only have their money to set their eyes on.”

I will not get into an argument with the Archbishop, as I respect both him and the Church. I am not sure whether he was referring to us, but if so, then I believe that he has been misinformed and I would welcome the chance to explain the projects to him.

If everybody thinks it would be better to have lower buildings, we will listen to these views. But then it must be everybody and not only those who attack us for other reasons.

That is a fairly ominous statement: what other reasons are there?

I have no idea. But we are being attacked personally and accused of greed and all sorts of other things. We are proposing to do something progressive, something better!

You are a minority shareholder in Electrogas. Enemalta issued the request for bids for the power station within four weeks of the election. Isn’t that pretty quick for a tender of this nature? Doesn’t this lend credence to claims of a pre-electoral deal?

The tender may have come out within four weeks of the election, but the intention to issue it had long been signalled, as had the fact that it would be for a gas-fired power station. Everybody was aware of that – and in fact the tender attracted many bidders.

I need to go back in history: my father was one of the first people to bid for large infrastructural projects. In 1968, we successfully bid for the desalination plant as the agents for Westinghouse. We built the gas tanks in Birżebbuġa and the oil tanks at the Freeport; we won two major tenders for extensive works for the first phase of the power station in Delimara and we were shortlisted for the Delimara II tender, which was eventually awarded to BWSC. We teamed up with Ericsson of Sweden to supply telephone exchanges and were the group that together with John Malone brought cable TV to Malta through our main investment in Melita Cable.

It is our job to anticipate what projects might be coming up and to have the right partnerships available in advance, just as we did with the phone system decades ago and earlier power station contracts. It has nothing to do with luck or pre-electoral deals.

We have a very clear conscience

So you are saying it was just good foresight that your shareholder Paul Apap Bologna knew so much about the EOI before the election…?

As I have already said, it was clear from long before the election that a new power station would be needed and that it would be gas-fired… We did our homework and were ready to go, with partners – in this case Siemens – which were able to deliver in the time required.

The only difference is that instead of going in for this investment as agents, we went in for it as a shareholder, to get a share in the profits rather than just commission. When there is something that we believe in, we move fast.

It is very unfortunate that you said you chose Siemens because it could deliver on time, because the power station is over a year-and-a- half late…

You are interviewing Joe Gasan, not the government. There was a tender. The Electrogas consortium made a bid, they worked hard on it, and they are delivering in line with the required specifications – and at close to the time frame they are committed to.

Why did they promise it would be up and running by March 2015? What was the delivery date you gave in your tender bid?

The Electrogas consortium never committed to have a power station up and running by March 2015. People can criticise the government for the delays if they want to. It is their prerogative. They can criticise the tanker being in the port. But this is a government tender which the consortium  bid for and which we are doing our best to fulfil. Why are we being criticised?

No one knows what is in the agreement you signed with the government…

Do you expect me to make the agreement public, as a minority shareholder?

Why was it not made public?

I don’t know why. That is a question you should direct at government

So Electrogas has no objection to the agreement being made public.

Not at all, as far as I am aware.

The European Commission has not yet approved the security of supply agreement. Is that because there is a good chance that Enemalta might not buy all of your electricity, as chairman Frederick Azzopardi also said in an interview, forcing the government to step in?

I honestly don’t know the answer.

What justification is there for keeping the tanker safety study from public scrutiny when it is going to be part of the IPPC [integrated pollution prevention and control] process anyway?

You are interviewing me, not the government…

Electrogas commissioned the study, so it is up to you to decide whether to release it or not… Why is the government telling you what to do?

As far as I am aware, all the studies are fine. And I don’t believe that government is telling Electrogas what to do.

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