The Malta Development Association makes reference to recent news headlines pertaining to the fast-changing plans of Smart City from what was once promised to be a futuristic ‘internet city’ touted to put Malta on the IT Map, to what has now been turned into a speculative residential and commercial project.
In 2007, the Government at the time signed a deal selling off circa 316,000 sqm of land for less than €5 per square meter which was supposed to lead to the creation of the aforementioned internet city, backed by a €300,000,000 foreign direct investment that was supposed to create 5,600 jobs and help Malta’s GDP grow to 10% which never materialised.
Heavy penalties were imposed on the acquiring company in case of breach of its obligations, including among the clauses, heavy fines, the possibility of contract termination and repossession of the land. Not only has the Government failed to enforce its rights under the contract to the detriment of Maltese taxpayers but the conversely, it has approved the latest masterplan modifying the scope of the project in its entirety. In fact, the new modifications reduce the total floor for office space from 51% to 9% whilst also increases residential space from 20% to 40% and commercial space from 29% to 51% when compared with the original masterplan from 2009.
The approval of the modification to the original concession, in the opinion of the MDA, has various detrimental effects which directly impact each and every Maltese individual. First and foremost, the MDA is vocal that public land should not be given for speculation. In all cases, public land should only be sold in the interest of the Maltese public giving due consideration to the best use of the land. Secondly, giving away public land at a cheap price for it to be resold back to the Maltese distorts the market. This method of operation tears down the level playing field which every stakeholder desires. These actions become all the more worrying in light of the fact that developers pay hefty taxes on private projects and undergo harsh scrutiny over minor details, at the same time, first time buyers spend the majority of their lives paying off loans to purchase from said private projects while on the other end of the spectrum, a handful of individuals stand to gain from speculative concessions with favourable terms and accommodating modifications. The MDA also expresses is doubts on the legality of the procedures of this particular case, especially in light of EU Law and considers opting for legal remedies which it might have at its disposal.