Five Govt departments to relocate to Bassadone building, freeing up Crown properties ‘potentially’ worth over £10m

Five Government departments will be relocated to the Bassadone Group’s building in the Dockyard, where new offices are being rented at a monthly cost of £21,600 to the public purse.

The move to 80A Queensway will free up severalGovernment-owned properties which have a “conservative” capital value of £10.2m and could “potentially” be put out to tender.

The agreement was criticised by the Opposition, which said it “does not make financial sense or deliver value for money”

Details of the deal with Bassadone Group were provided by Chief Minister Fabian Picardo in response to questions from the Leader of the Opposition, Keith Azopardi, on behalf of GSD MP Damon Bossino during Thursday’s session of Parliament.

Mr Picardo told Parliament that the Government had signed a 21-year lease with the Bassadone Group for 3,618 square metres of office space at a cost of £21,816.88 per month.

That represents the equivalent of some £6 per square metre, “a very decent rate”, the Chief Minister said.

Payments commenced mid last year and some £610,866.69 has been paid to date, although the offices are still being fitted and the departments have yet to relocate.

The departments include the Care Agency, part of the Treasury, ITLD, the Department of Education and the Technical Services Department.

Mr Azopardi asked the Chief Minister whether the Government considered the deal represented good value for money for the taxpayer.

“We do believe it's value for money,” the Chief Minister replied, adding that the reality of many government properties was that they required “a lot of expense” and costs were “increasingly astronomical”.

“In some instances, the Government is unable to carry out the deep refurbishment required to these buildings in order to produce offices that we would consider to be modern and fit for purpose for the people that do such an excellent job of working for the Government.”

“Indeed, we just have to look at this building [meaning Parliament House] to see how difficult it is to refurbish whilst we continue to use it and the cost involved in refurbishing a very old building, going back to the brick and rewiring, etc, etc.”

“So moving to bespoke modern office buildings gives us a modern environment for those who do the job that we need them to do on behalf of the public and also reduces the maintenance cost in the long term and reduces the periodic maintenance investment required in the fabric of buildings.”

“So we judge that this is, for all of those reasons, the right use of taxpayers money and a better way to house sections of the public sector.”

“We don't discard the possibility of potential new builds in the future where the Government would be the owner occupier of new buildings that wouldn't suffer the liabilities that I'm referring to in the context of the majority of the government's existing estate.”

Mr Picardo said among the buildings that could be released were properties in the “very sought after” New Harbours area, which would in turn assist businesses wanting to expand or start up.

Mr Azopardi also asked about the money that had been paid to date even though the new offices had not yet been occupied.

“Is the Chief Minister saying that the rent has been paid but the civil servants are not using the building?” he asked.

Mr Picardo replied: “When you buy a house, you buy it and you start paying the mortgage whilst you refurbish it, unless you're very desperate and you move in and you are in there without a bathroom and without a kitchen and without the curtains and all the rest of it.”

“So what we are doing is we are fitting out in this period. We are required to pay the rent whilst we fit out.”

“That would be normal in every single arrangement ever done in any circumstances.”

“You get a short rent free period, but you can't do the sort of fit out that you have to do to the standard that we require the cabling that we require in the rent free period.”

And he added: “We are paying because we need to pay to have possession whilst we are carrying out the fitting out before the civil servants can move into the offices that they deserve to be working in, which should be modern, which should be fit for purpose and which should have all of the attributes that you need today.”

Mr Azopardi quizzed the Chief Minister further on this point, suggesting that perhaps “a better deal” could have been negotiated.

“Because we've paid already 18 months’ rent, it still hasn't been fitted out and the civil servants aren't there,” the Leader of the Opposition said.

“How much longer is it going to take for the government to be paying rent without the civil servants being there?”

The Chief Minister replied: “We think we've done a very good job, actually.”

“We've got a very good rent. It's a very low rent per square metre.”

“We think we've landed the deal right and we expect that civil servants should be able to move in in the next six months.”

But the GSD remained unconvinced and underlined its concerns in a statement after the exchange in Parliament.

“This significant expense does not take account of the cost outlay there will be in kitting out the office space,” the Opposition said in the statement.

“While the sale of the properties where the departments are currently housed are, according to the Chief Minister, expected to realise between £8.8M and £10.2M, the reality is that there will be an on-going rental liability into the future,” the statement said.

“There will also be a loss to the Government of clearly valuable real estate for ever.”

“All of this has been done on the potentially questionable basis that the Government says that the cost of
refurbishment is prohibitive.”

“Given that the 21 year lease will cost £5.5M and does not include the cost of fitting out the 3600m2 of property is this deal value for money?”

“What all of this shows is that a well-known business entity which is very closely connected with the GSLP will receive millions of tax payer pounds on the one hand while the Government, on the other, sells off public assets, no doubt to raise much needed cash in the first place.”

The GSD’s Damon Bossino added: “The deal is for all these reasons, highly questionable and smacks of a Government that is so desperate for cash that it is selling its own offices. Who, in the end, benefits?”