Rooke loan repayments under way as project awaits fire safety clearance

Loan repayments have been made towards the £38m Rooke Elderly Care Facility with fire safety certificates needed to complete the long-delayed project, the Minister for Inward Investment Sir Joe Bossano told Parliament on Tuesday afternoon.

The Rooke project has suffered lengthy delays since construction began in January 2023 when the furnished modular units arrived on the Chinese cargo ship Great Faith.

At the time, completion was expected by summer 2023 but now, two years on and £38m later, certificates of fitness are needed to complete the project.

Sir Joe told Parliament the funds loaned by the Gibraltar Savings Bank are currently being repaid, with the current amount invested in loan notes for the Rooke project now standing at £35m.

“It has started being repaid and therefore this is the money that the Savings Bank is owed on that project,” he said.

He added that there is no expectation that any more loans would be needed.

Last month, it was announced the Rooke Elderly Care Facility would be ready by July, though Sir Joe did not provide any further clarity on the completion date.

The final use of the facility remains unclear at this stage, with the Opposition pressing for details on its completion, after a parliamentary exchange last month.

But, Sir Joe said, the project was at the testing stage with the fitness of on-site equipment being assessed.

Shadow Minister for Housing Damon Bossino questioned Sir Joe on whether this was a reference to fire safety equipment, which his parliamentary colleague GSD MP Joelle Ladislaus had queried a day prior.

On Monday, the Minister with responsibility of GFRS, Leslie Bruzon, had responded that the GFRS had carried out a number of on-site inspections.

Mr Bruzon told Parliament that fire risk assessments were the responsibility of the construction company's onsite safety officer, and that fire safety requirements and a Fire Strategy Report was provided by AMA services Ltd.

“We can confirm that this building is required to be built to the fire safety standards that were relevant at the time of application,” Mr Bruzon said.

“The GFRS fire safety department will only issue their ‘no objections to the issuing of a certificate of fitness’ once they are satisfied that all of their requirements have been met.”

On Tuesday, Mr Bossino asked whether there was any concern regarding the need for a certificate, which Sir Joe rejected.

“I have no concern, no. There's no reason why I should have,” Sir Joe said.

Sir Joe confirmed that pumping stations for the sprinkler system were installed but contractors are waiting for the manufacturer to test this equipment.

Separately, Sir Joe added that there had been issues between the contractor and a supplier regarding payment.

Sir Joe said he understood that regarding specific elements of the modular home.

“I know that some the things were designed which the person that designed it was wrong and had to be removed and had to be done again,” Sir Joe said.

He is aware that there was a specific element that the company has told the supplier that they would not pay twice for as there was an issue the first time.

“The people who took that decision were wrong and apparently there is a dispute there that they expect to be paid for what they did wrong what and for what it costs.”

“And the company is saying that since the cost of replacing what was originally done was their fault, they are not paying.”

“This is a matter that does not have anything to do with the fact that the funding is from the Savings Bank or from the Bank of England or from NatWest.”

SAVINGS BANK

Savings Bank funding on projects and repayments was questioned by the Opposition, particularly loans granted for the refurbishment of pre-war properties.

Sir Joe said the investment of £1m into the Hargraves refurbishment project is “miniscule” compared to the £1.9b the Savings Bank holds.

The pre-war flats have been empty for over 20 years and, in terms of Government spending, funding repairs on flats set to be rented at low prices is not economically viable.

Sir Joe estimated that, once complete, the flats would be rented out at a cost of around £45 to £50 a month, but repairs would cost in the thousands.

“That money would never be recoverable,” he said.

He detailed that, previously, these properties would be put on the market and these flats would enter the open market at high market values of around £8,000 per square metre.

Sir Joe said that instead of making “some people very wealthy and aggravating the housing problem”, the decision was taken for a non-profit company to repair the homes and sell for a competitive price.

“The idea is that this flat once bought from the company can only be sold back to the company,” Sir Joe said.

These flats will essentially remain price-controlled, with the price set on inflation or tied to a reduction on the housing market.

“It is something that has not been tried before,” he said.

“It is, at this stage, experimental in the sense that we don't know how much demand that's going to be for this.”

The £1m loan will repair seven or eight apartments.

Sir Joe confirmed that the Government will not be involved in the sale of the flats, but that the funding provided by the Savings Bank has been set for public interest projects.

“The whole idea is that instead of these buildings finishing in the open market and therefore removing property from the stock that is available to ordinary working people, what we’re trying to do is something that has not been tried before, is to find a way of doing it and not doing it as the Government, but doing it independent.”

He added that he was not here to seek the approval of the Opposition and that he is offering an opportunity to enter the property market for people with limited means.