Issue link: https://maltatoday.uberflip.com/i/906955
8 News MATTHEW AGIUS MOVIMENT Graffitti has given a lukewarm welcome to the new mas- terplan for Manoel Island. The left-wing NGO, which played a strong role in Kamp Emergenza Ambjent's effort to regain access to the public coastline, reiterated its stance that on principle no commer- cial development should take place on the islet. The land was granted on a 99-year lease to the Midi consori- tium, the Tigné Point developers. Graffitti said it noted "significant improvements over the Masterplan presented earlier this year, evidence that non-partisan movements can achieve tangible victories against big and powerful interests." Midi plc, which was granted a 99-year concession over a large part of Manoel Island in 2000, earlier this year presented a masterplan for its re- development – which included a ho- tel at Fort Manoel, a shopping com- plex and a casino-hotel at the historic 18th century Lazaretto, retail outlets and luxury low-rise apartments, a hel- ipad and a superyacht marina, while also taking over the foreshore togeth- er with the current swimming spot beneath the fort, to build a water taxi pontoon. These proposals were later removed following public outcry. Gzira residents and activists had opposed the development, arguing that Manoel Island should be re- turned to the public and turned into a national park. "Manoel Island should serve as a stark reminder of how senseless it is to give away public land for private interests," Moviment Graffiti said. "This area was given to Midi through a bipartisan agreement in Parliament many years ago. Public access was then illegally blocked for 17 years and MIDI will now be reaping profits from several structures built on pub- lic land, and a hotel set in a historical building, the Lazzaretto. "The trend of giving away public land to private companies continues unabated till this day. One such case was the recent transfer of the ITS building to the DB Group, where a horrendous project with disastrous impacts on residents and the envi- ronment is being proposed." But the Manoel Island issue also showed how non-partisan move- ments can achieve tangible victories, said the group. "After a month-long struggle last year, the Local Council alongside residents and organisations and indi- viduals involved in Kamp Emerġenza Ambjent forced MIDI to open public access. Moreover, last April, resi- dents, the Local Council and Kamp Emerġenza Ambjent had expressed their alarm over a Masterplan un- veiled by MIDI. It was emphasised that plans for a hotel on Fort Manoel, a shopping mall, a casino, a helipad and a pontoon for water taxis on Manoel Island are completely unac- ceptable." The left-wing NGO greeted the omission of these features from the new masterplan with trepidation, mistrustful of the consortium's long- term plans. "Moviment Graffitti notes with satisfaction that, so far, this kind of development does not feature in the new masterplan. But, considering the abysmal record of MIDI with break- ing contract provisions and being al- lowed to get away with it, it should be ensured that this intense develop- ment never takes place, and that pub- lic access is guaranteed at all times." maltatoday SUNDAY 26 NOVEMBER 2017 Graffitti cautious of new Manoel Island masterplan CONTINUED FROM PAGE 1 The Times yesterday said the PN had placed 10 of its clubs in a trust – Patria Trust – in 2015, under the control of former EU Commissioner Joe Borg, with the specific intent of selling the property within 10 years. The deed of the trust was made at HSBC Bank's Valletta office around mid-2015 as part of a "securitisation process" and the party raised about €2 million from the initiative. The decision was yesterday described as a "sound and in- telligent financial move" by PN leader Adrian Delia, who was not a party official when the former administration put the clubs in a trust. Delia told MaltaToday the present administration might consider broadening it further, but said he could not divulge commercial details. "What I know is that it was an intelli- gent decision at the time and I do not discount expanding on it," he said. "The trust was merely part of a solid restruc- turing plan that my team and I have embraced wholeheart- edly." Delia could not confirm if it was the bank that had insisted on the trust, instead of a sim- ple banking guarantee, saying he had not been privy to the discussion at the time. "But it is normal in business, when you own property and have debt, to put up the prop- erty as guarantee until you prove that you have the ability to service that debt," he said. The securitisation model is, however, different from a banking guarantee "Introducing this securitisa- tion process implies that the bank was leery of being paid the money in full if left up to the PN, or being paid ahead of other creditors," an ana- lyst told MaltaToday. "Placing the property in a trust means that the 10 clubs effectively no longer belonged to the PN, but to the trust, of which the bank will undoubtedly have been named sole beneficiary." In fact, a trust goes way be- yond the party putting the property as a guarantee when requesting a loan or an exten- sion to payment on the inter- ests due. By law, if a creditor were to take the PN to court to seek repayment or if the party de- clared insolvency, any money recovered by the courts would first go towards paying em- ployees' salaries. Next to be paid would be the government, which would seek payment for national insur- ance contributions, tax and VAT. Only then would the courts start considering set- tling claims by other creditors, including the banks. "But by having the property in a trust, and therefore no longer belonging to the PN, those clubs would be safe from being seized by the courts and would remain under the con- trol of the trustee," the analyst said. The source explained that such trusts were today being set up more frequently, even by individuals wanting to avoid their heirs paying succession tax on their demise. In such cases, a person may place his property in a trust and indicate in a so-called 'let- ter of wishes' that he wants to remain beneficiary until his death, when his children would become the trust's ben- eficiaries. Since any property in the trust would not, in fact, belong to either the parent or the heirs, no succession tax is paid. "In the same way, HSBC would therefore circumvent any legal claims to the PN's property and ensure it remain sole beneficiary of the sale of the property," the analyst said. "For the bank to go so far, the PN must be heavily exposed and HSBC would have had no guarantee whatsoever of when – and even if – it would ever get its money back." Delia would not commit him- self when asked if the sale of the properties would solve the party's financial problems, if further drastic action would be necessary or if other schemes were being considered. "I know that we will continue to improve the restructuring programme as necessary," he said. "As the world turns to digital media, for example, we definitely need to reassess the money the party used to spend on digital media." The PN leader said the party needed to balance its finances, but insisted the finances were not in as dire a situation as some were trying to portray them to be. MaltaToday previously re- ported that the PN had a debt of some €25 million. A repayment programme covers several outstanding debts with various banks: €3 million payable to Bank of Valletta, €7 million to HSBC, €1 million to APS Bank, the €4 million that was collected through the PN's 'cedoli' loans scheme – which capital was used to repay other loans and reduce interest rates on out- standing loans; but also anoth- er €6.5 million in outstanding national insurance contribu- tions, €2 million in pending utility bills to ARMS, and oth- er creditors. pcocks@mediatoday.com.mt 'Patria' trust ensures bank gets paid first