GSD Repeats Calls For Financial Arrangements To Be Published
The GSD says the GFA’s comments on repaying the Savings Bank from the profits of the commercial and residential development “raises value for money issues in the realisation of public assets”.
A statement from the GSD follows below:
The confirmation by GFA that it expects to repay the Savings Bank from the profits of the commercial and residential development once again raises value for money issues in the realisation of public assets.
The land was not sold with development rights in 2016 nor has the Government said that it has now extracted value from the GFA by way of a premium to allow this development to happen. This is a key question that remains outstanding. As things stand it seems that the GFA would be retaining or using the profits of a development in respect of which it has not paid a premium for development rights. The Government must now confirm why if this is so?
The additional confirmation that no UEFA monies would be used in the project is a complete u-turn on the previously announced position. In 2016 when the Victoria Stadium and land was bought (without development rights) for £16.5M the GFA confirmed that they would then use an additional £15M of UEFA money to reconstruct the stadium. What happened to that financial commitment? In turn the Government promised in 2016 that no taxpayers monies would be used to fund the stadium construction.
The Government continue to be silent about the actual extent of the “loan” being advanced by the Savings Bank for this project. Is this of a sum in the order of £100M? If not – of what sum? Savers are entitled to know. Additionally, the continued use by Government of the opaque Community Service and Supplies Limited structure is questionable and intransparent? We note the statement issued by the directors of CSSL which is hardly an
exercise in clarity. We cannot see why it is necessary to organise public projects through charities when these are clearly Government driven projects with planning applications signed by civil servants.
In the interview with GBC the GFA said that they had been advised of costs in the region of £40Million for the football stadium and that even UEFA were surprised it would “cost so much.”
Leader of the Opposition, Keith Azopardi said: “So many questions remain outstanding here. The Government first said the project would cost £100M and then said that was the value and not the cost. It has not confirmed what the precise cost is. Why? Is it correct that the cost of the stadium without the commercial development is in the order of £40 Million? The fact that GFA is apparently using the profits of a high-value commercial development so as to pay the Savings Bank raises value for money issues because without paying a premium for the development rights all that is happening is that the Savings Bank is being repaid out of profits that rightly belong to the taxpayer. In other words this – in effect – would breach the promise by Government that no taxpayers funds are being used to fund the project if the GFA is actually receiving an indirect subsidy by the taxpayer by not being charged a premium. This deserves immediate clarity.
Why should the Savings Bank be restricted to a small rate of interest return of 6-7% if it is stumping up all the cash for the development? Why should the taxpayer not receive a premium if the GFA want to develop the land commercially and for residential development? What should be happening is that the GFA should either have paid a substantial premium to develop the land or that the taxpayer should retain the profits from the commercial development. Neither of those scenarios have been confirmed by the Government. This should not be left to guesswork if the taxpayer and saver is to have value for money. The Government needs to make the position clear.
Beyond all that the continued structuring of these public projects through the CSSL structure raises many serious questions of transparency.”
The GSD repeat our call that the financial arrangements be published so that the value for money issues can be judged.
