By Matthew Farrugia

Copyright maltatoday

Deputy Prime Minister Ian Borg has convened parliament’s National Audit Office committee to discuss the scandalous Fortina contract approved in 2019 after an investigation uncovered a valuation report was kept hidden from MPs.

During the urgent committee meeting, Borg, who chairs the committee, was asked by PN MP Darren Carabott whether he feels that he has a conflict of interest given that he was lands minister in 2019 when the deal was approved.

Borg said that he has no objection in asking the Speaker of the House for a ruling, but noted that he would not abdicate from his responsibility as the committee’s chair.

Borg added that the MPs sitting on the committee have the responsibility of making sure that the price of the deal is a just one.

Carabott said that on top of this, the committee should ensure that no failings in the system of checks and balances repeat themselves.

Government and opposition MPs disagreed on whether the committee should recommend the Public Accounts Committee to open a discussion on the scandalous contract.

Borg said that the parliamentary committees should move one step at a time.

The committee’s discussion is set to open on Monday 6 October.

The scandal

A National Audit Office investigation tabled in parliament on Monday revealed how the Fortina Group paid less than half the amount owed to have conditions imposed on several parcels of public land in its possession lifted.

Fortina paid €8.1 million but a valuation report kept hidden by former Lands Authority chair Lino Farrugia Sacco, now deceased, put the valuation at more than double the amount paid.

The deal was signed in 2019 after parliament approved a proposal put forward by Borg, who was then lands minister. The Opposition had voted against.

In his comments to Times of Malta on Tuesday, Borg said he will be asking the auditor general to provide the parliamentary committee with the documentation that had been kept hidden.

“We MPs are not there to protect those who hid the documents from the minister, the parliamentary secretary, and parliament. We are there to defend the people,” he said.

Borg said he will also ask the auditor general to provide the committee with a separate valuation commissioned by the NAO as part of its probe.

“I will also ask him to present the other report he commissioned to verify the value of the land. Then we should enter this discussion with an open mind and ensure that every cent owed to the people is paid,” Borg said.

Damning findings

The NAO investigation found that the price tag of €8.1 million was based on a vitiated process when architects appointed by the Lands Authority were given incorrect terms of reference by then CEO Carlo Mifsud. The architects were only engaged to provide a valuation of one parcel of land when Fortina was requesting the removal of conditions on four parcels of land.

Significantly, the NAO probe also found that a valuation report commissioned by the Lands Authority board of governors in March 2019 to rectify the gaps in the original valuation was kept hidden by the chair former judge Lino Farrugia Sacco, who died in 2021.

This second report, which was only provided to the NAO by the audit firm, had valued the lifting of all conditions on all parcels of land at between €18 million and €23.9 million, depending on the repayment terms.

Nonetheless, Farrugia Sacco kept this report hidden from the Lands Authority board, the minister and parliamentary secretary, and consequently also parliament.

Indeed, the NAO probe found that Farrugia Sacco even lied to the board when in June 2019 he told them the valuation was still pending when the report had been in his possession since April of that same year.

Another person who knew about this report was Keith Schembri, former chief of staff at the Office of the Prime Minister, with the NAO probe revealing that the audit firm was instructed to invoice the OPM rather than the Lands Authority for its work.

Schembri told the NAO he could not recall what role he played in the Fortina deal and in a Facebook post on Monday denied any wrongdoing.

A separate valuation of the lifting of conditions commissioned by the NAO as part of its investigation put the price tag at €21 million.

The Fortina Group has denied wrongdoing and said it will be evaluating the NAO report in detail before commenting publicly about the findings.