Saturday, February 19, 2005

GSLP/LIBS Against Mid Town Development Project

Govt selling land below market price

Opposition spokesman for Trade Joseph Garcia has accused the Gibraltar Government of “placing private profit over public needs” and allowing “a free-for-all for developers to make a fortune at public expense.”

In a strongly worded statement related to the proposed mid-town development, Dr Garcia criticises the Government for having no grand planning strategy or master plan.

Expressing the GSLP/Libs total opposition to the project in its present form and the manner in which the Caruana administration has chosen to go about it, Dr Garcia says that Government has “undersold the land by agreeing to take buildings and a park in exchange for a fraction of what it is worth.” Dr Garcia added:

Quite apart from the economic considerations, a number of issues emerge as a result of this project. Firstly that there are a number of large developments in the pipeline at a time when the new development plan has been considerably delayed. This plan has not been reviewed since 1991. The second issue is the continued predominance of luxury housing aimed at outsiders over low-cost accommodation for Gibraltarians. The third issue is the large scale of this and other proposed developments which creates legitimate concern for heritage and environmental considerations.

In a statement issued this week the alliance said:

The details of the deal with the developer indicate that Government would obtain a school, a park, a car park, and leisure centre in exchange for the land on which the developers intend to construct offices and luxury homes. The works that the Government would receive were valued at £10 million.

The Government has sold the land well short of its market value. For instance, a private developer recently acquired land further away from the city centre at a cost of £1250 a sq metre. Our calculations point to the fact that the land for the mid-town development is worth in the region of £20m-£25m. This is more than double what the Government has valued it at.

When asked on GBC's Viewpoint recently how Government had come to the figure of £10 million, Minister Joe Holliday had no credible answer. It also remains unclear why the Government preferred the developer to provide buildings, parks and car parks as opposed to the £10 million in cash. This would then have allowed the Government the flexibility to proceed with the other projects at its own pace and maybe at a more competitive price.

The Minister was equally unable to defend the manner in which the development had been allocated, except to say that it was in the economic interests of Gibraltar. Tis plot of prime land in the city centre has been awarded to a Dutch-Gibraltarian consortium by direct allocation. This means that the Government have been unable to establish whether any other potential developer would have offered more for the same plot of land. It is therefore a nonsense for the Government to say that this deal was in the economic interests of Gibraltar when they did not know whether there was a better deal available from somebody else.

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