MaltaToday | 03 August 2008

INTERVIEW | Sunday, 03 August 2008

Giving Caesar his due

Jason Azzopardi is the first parliamentary secretary in the Republic’s history entrusted with the defence and administration of public land. But can he standing up to powerful lobbies of squatters, speculators and developers to bring about the necessary reforms?

Government land is an under-valued asset. Ever since independence, it has been rented or leased for a pittance, liberally dished out to hungry developers, and left undefended in the face of squatters, developers, hunters and trappers, and so on.
Typical of all ministers in the re-edited version of Lawrence Gonzi’s cabinet after last March’s election, Azzopardi openly denounces the legacy he has inherited, and zealously outlines ambitious plans to strengthen enforcement, stop abuses and give back to Caesar dues which were left uncollected in the past two decades of PN governments.
Upon being appointed as a parliamentary secretary in the Ministry for Finance, Jason Azzopardi demanded inventory of the rents the government receives from its properties in Valletta. It turned out that each shop in Valletta was paying an average of Lm90 (€ 217) a month to the state.
The income derived from this prime commercial site is less than the state’s expenditure on wages to its employees in the Lands Department.
“In Valletta we have 576 commercial tenements. From these, the state receives €1.5 million euros a year in rent. For comparison’s sake, government spends €2.1 million in wages for the 141 employees in the government property division.”
He makes it clear that the state will no longer allow its assets to remain undervalued. Taking the cue from the government’s plan to reform rent laws to give landowners what is due to them, he insists that the state also expects the same treatment.
“Just as the citizen has a sacrosanct right to get a fair return on his property as a landowner, even the state has the same right. It is not fair that simply because the owner is the government, its property remains undervalued… Surely the government should not be privileged when it rents property from the private sector. But it should not be penalised as an owner. What’s good for the goose is good for the gander.”
Azzopardi believes that cheap government rents are distorting the market.
“Some are renting from the government for just Lm1,000 a year. Just two door steps away someone else is renting from a private owner for Lm10,000 a year. How can one speak of fair competition?”
Azzopardi acknowledges that any changes in this sector must be “gradual” and “phased over a period of years.”
“This cannot be done overnight because first we need an organised system which needs a lot of investment in IT and human resources.”
But he has a clear idea on how he intends to reform this sector taking the system used in French cities like Marseilles as his model.
“Let’s take Valletta as an example. The town should be divided into grids. In a transparent way the government will establish the rent owed for commercial establishments in each particular grid. The market value for a shop in upper Republic Street is different from that for a shop in lower St Dominic Street. Therefore one cannot expect them to pay the same rent. Let’s establish the objective benchmarks.”
Over the years some owners have found a way to sidestep the government ban on leasing government-owned properties to third parties, by signing management agreement with their new “tenants.”
But Azzopardi makes it clear that this practice is “illegal.”
“This is illegal. There are cases of individuals renting property in Valletta for just Lm500 a year. By signing a management agreement they manage to gain Lm10,000 a year.”
But Azzopardi insists that for the past four years since his predecessor Tonio Borg assumed responsibility for the Lands Department, the Lands Department has deemed any management agreement as tantamount to sub letting which is illegal.
“For me people who are making money on the side through management agreements while paying peanuts to the government, are committing daylight robbery.”
In the near future, he intends to examine the situation of shops which are breaking the law by signing management agreements while renting from the government.
Another reform envisioned by the government is to give farmers who lease land from the government the security of tenure deriving from an emphyteutical title.
“There is a mistaken mentality that an agricultural lease automatically results in security of tenure. In reality this is far from the case. The law states clearly that the state can take the land back whenever it requires the land. Technically their tenancy is renewed from year to year through the payment of field rents. An emphyteutical title would give security of tenure for a long period of time and this also facilitates bank loans. A bank is more disposed to lend money to someone with a durable legal title on the land. In this way farmers would be willing to invest more in agriculture, to the benefit of the whole country.”
Systematic encroachment on public land and the foreshore is another consequence of the state’s inability to defend its own ground from arrogant lobbies.
Azzopardi reveals that the Lands Department only has two enforcement officers to defend public land from squatters and commercial establishments usurping public land. An internal call in the public service is to be issued in the coming days to increase the contingent of enforcement officers. Yet before doing this, Azzopardi faced another hurdle – the grade of “enforcement officer” did not even exist in the public service.
Just 15 days ago, these two enforcement officers were sent to Sliema, Xlendi and Marsalforn to remove chairs which were obstructing pedestrian access in an action coordinated between Jason Azzopardi and Mario De Marco.
“It was not fair that some establishments were illegally occupying a pavement in a way that a mother with a pushchair could not even pass.”
Azzopardi also reveals that for the first time since 1987 an inspection took place at the Camarata in Valletta.
“The whole basement of the Camarata, which contains 14 stores, was being used illegally. In our inspection we found a tuck shop, a gym, a boathouse and an aviary… All this illegally in a basement. These squatters were evicted. Their property was taken away. If the things found are not reclaimed back by owners in the space of a month, the goods will become government property.”
To combat similar abuses, Azzopardi also intends to introduce a 24-hour free phone service through which the public can report illegal squatters.
During the summer, people constantly complain that beaches are occupied by deckchairs and umbrellas leaving little or no space for bathers unwilling to pay for this service.
Azzopardi claims that the matter is being jointly tackled by the Malta Toursim Authority and the Government’s property division.
“The MTA and the Land Department are meeting to draft a legal notice through which whenever there is an encroachment on public land which breaches permit conditions the owner is fined for every chair, table or article on the illegally occupied space.”
As things stand today, the state can only remove the tables or chairs, which may then be reclaimed by the owner after a few days.
The government also intends to reclaim property leased to owners in the past which has fallen in to a state of disrepair.
The Lands Department has already instituted two court cases to reclaim land occupied by the derelict Riviera Hotel in Ghajn Tuffieha.
“The Riviera Hotel poses a grave danger to the public. The owners have also breached the conditions set in the emphyteutical deed which stipulated that the hotel should not be left abandoned for more than a few months.”
Azzopardi makes it clear that in this case he is following the orders of the Prime Minister.
“The Prime Minister wants the land to be restored to the public in its original natural state so that the bay can be enjoyed by the public. He asked me to intervene in this case and we have instituted legal proceedings to terminate the lease.”
Another structure which the government wants to reclaim back for the public is a square in Sliema, currently occupied by the Magic Kiosk.
“The emphyteutical deed for the Magic Kiosk will expire in December. This is why we have presented a judicial protest, officially warning the owners that the government has no intention of renewing the lease. Our intention is to embellish the square as a public space.”
He also reveals that the Prime Minister has also asked him to start the process of terminating leases in two other areas which he intends returning to the public in their original state.
Yet does all this zeal for law and order contrast with the pre electoral commitment not to demolish any of the Armier boathouses build before 1992?
“This is a different thing. The Prime Minister never condoned illegal structures or abuse of the law. The Armier case is very particular because many of these residences were provided with water and electricity. This was the normal practice for the past 30 years. It is difficult to speak of illegality when the state provided services to these structures.”
While absolving the Armier squatters from giving Caesar his due, Azzopardi intends to introduce changes to the law to make squatting a criminal offence, rather than a mere contravention.
Another major reform spearheaded by Jason Azzopardi is that of the Joint Office – the government entity responsible for more than 80,000 properties transferred by the Church to the government in 1992.
In 2001, the Joint Office had introduced a number of schemes through which tenants could redeem the lease by paying a sum of money to become the owner of their property.
Azzopardi’s first priority is to cut on the backlog of people still waiting to redeem these leases, six years after the scheme was introduced. He intends to reduce the backlog by farming out this service.
Yet Azzopardi is also concerned by what he describes as a “perfectly legal abuse” through which people are speculating on land redeemed from the joint office.
“In one case in Sliema, a property was redeemed for just Lm500 according to the law. Just two months later the property was sold for Lm80,000 to be replaced by flats. This is not fair.”
Azzopardi wants to create a mechanism through which a percentage of earnings made by individuals who sold property redeemed from the Joint Office is recovered by the state.
He also suggests that the money recovered by the state is deposited in a “fund for sustainable development.”
“The Prime Minister intends to create this fund, through which the government would be able to expropriate unsightly sites in order to return them to the public. This is the express wish of the Prime Minister.”
Malta still lacks a database which clearly identifies government owned properties.
“The only way to determine what the government owns is by manually going through thousands of files at the government property division.”
There is no system through which one can assess this information online. One of the advantages of an online database would be that any prospective investor could check which government-owned properties are currently vacant.
“At present there is no way through which someone interested in opening a shop can check which properties are vacant in Valletta.”
One of Azzopardi’s first commitments is to set up such a database. Last week Azzopardi left to London to spend a day meeting officials in the UK’s government property division to see how their IT set-up works.
The parliamentary secretary is also aware of the vast revenue generating potential of government owned land.
“Public land is second biggest resource we have in this country after its human resources. The government is the biggest estate agent in the country but surely it is not the richest. We surely can make a more rational use of government owned land. This is an untapped revenue-generating facility.”
Surely if Jason Azzopardi were to implement his entire programme by the next election, he could end up joining John Dalli and Austin Gatt as the government’s third “Horseman of the Apocalypse” – as he faces the arrogant lobbies standing in the way of reform.

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