Eastside £90m premium ‘entirely sourced’ from TNG, Govt says in response to GSD concerns

The £90m paid by the TNG Global Foundation to the Gibraltar Government for the Eastside reclamation plot is sourced entirely from the foundation and involves no public money, the Gibraltar Government said last night as it responded to questions raised by the GSD.

The GSD had earlier said that the payment of the premium on the last day of the financial year “leaves open the question as to the source of monies”, adding the issue required “further exploration” given the Government’s “track record of opaque use” of Credit Finance, the Gibraltar Savings Bank and “public funds generally”.

The GSD called on the Gibraltar Government to confirm that none of the £90m was provided by the Savings Bank, Credit Finance or any government entity, and that no public or savers’ monies had been used on this project.

No.6 Convent Place was swift to respond to what it described as the GSD’s “unfounded claims”, which it said “could potentially harm Gibraltar's reputation”.

“The Government emphasises that all funds paid as the £90m premium for the Eastside project have been sourced from TNG Global Foundation and are entirely independent of the Government, Credit Finance Company Limited, and the Gibraltar Savings Bank and are not otherwise connected to any sources of funds originating from the Government,” No.6 said in a statement.

“Additionally, the lease in question will be registered and publicly available, providing full transparency of the terms of it.”

“The GSD's assumptions and allegations are, therefore, as usual, entirely erroneous and incorrect.”

The GSD has also questioned the timing of the announcement and the period of negotiation of the Eastside deal.

It said the project was adjudicated “with much fanfare” in October 2021 by the Government to TNG, an entity which “had not even submitted a bid” within the expressions of interest process conducted in relation to the Eastside.

“Indeed it was a company that did not even exist when the expressions of interest process closed,” the GSD said.

“That in itself raised serious questions at the time [and] 18 months on very little has substantively happened on site.”

The GSD said the deal was announced in 2021 and heads of terms signed at the time, but that just three weeks ago, responding to questions in Parliament, the Chief Minister accepted that there were still aspects under negotiation.

“The payment of the premium on the very last day of the financial year with the lease signed the same day shows how much of a last-minute scramble all this has been to save the Government from presenting an even bigger hole in its budget,” the GSD said.

“The Government should now publish the full set of contractual arrangements entered with TNG in relation to this site. If it does not do so a future GSD Government will.”

But the GSD’s position was dismissed by the government, which underscored that TNG had already invested millions of pounds on the Eastside project, covering professional fees for planning and the construction of the revetment for Hassan Centenary Terraces Phase Two.

“Once more, the GSD demonstrates its willingness to resort to any means during an election year to unjustly discredit the Government, even at the expense of Gibraltar's reputation,” Mr Picardo said.

“The public will not be deceived by the constant and unconstructive GSD sniping.”

“What will be evident for all to see is that all funds paid in this regard originate from TNG Global Foundation, and that the Government has secured an outstanding deal for Gibraltar and its citizens with this project which will herald huge, positive economic impact for decades to come.”

“The GSD’s unfounded criticism, however, will be no more enduring than second hand fish and chip wrapping paper tomorrow.”

“The transformation of the Eastside will be remarkable and will significantly benefit our community.”

“That is what the Government has delivered and what TNG Global Foundation has financed for itself, without any Government or Government related financing sources.”

“What is hugely disappointing for everyone in our community is that instead of being pleased for the benefits for Gibraltar and for Gibraltarians of all political parties, the GSD instead immediately reach for the standard criticism press release, whatever the negative effect on Gibraltar.”

TNG, a foundation linked to the Vietnamese businessman who owns Trusted Novus Bank, last year secured outline planning permission for an ambitious plan to construct a mix of residential and hotel accommodation on the site next to a marina and a new botanical garden.

The £90m payment is part of a wider deal announced in October 2021 under which TNG will also undertake further works in the area valued at a further £240m, including sea defence works, affordable housing, berths and public parking.

After numerous failed attempts in the past to find developers for the site, Mr Picardo expressed confidence that TNG’s project would develop the Eastside plot “into a new city for Gibraltar” that would have knock-on benefits across the community.

“I think this is now a runner, it's a goer, it's happening,” he said.

“They can do it, and they want to do it.”

The Chief Minister said Sir Joe Bossano, the Minister for Economic Development, had calculated that the project, which will take a decade to complete in different phases, would generate an economic impact of £2.5 billion, perhaps more given inflation.

“Whether you are directly in the construction trade or not, this is going to have a positive effect in economic terms,” he said.

He noted too that TNG had a track record in Gibraltar through its ownership of Trusted Novus Bank and was already nearing completion of construction of the new Bishop Fitzgerald and Governor's Meadow schools, which will be handed over to the government in coming months.

TNG also secured the rights to develop the plot of the old Bayside School.

“You're dealing with a very solvent entity here that is able to deliver against the sort of macro project that you're going to see on the Eastside, which is, in effect, the development of a new city for Gibraltar and will provide for expansion for Gibraltar for many years,” Mr Picardo said.

“So I think the important issue here is that this is a group that is proven in Gibraltar, is solvent and can deliver against an ambitious project like this one.”

He also played down the GSD’s concerns about the fact the deal was signed last Friday, the last day of the financial year.

“It’s not unusual in commercial transactions of this sort that the negotiation goes to the wire,” he said.

“Every time you look at a lease, you realise that there’s something else to change and that you need to perfect it in some way.”

‘We could have signed three weeks ago, but it was a question of perfecting documents and making sure that it was in the form that lawyers wanted to see it.”