Govt defends Bassadone deal after GSD criticism

The Gibraltar Government has hit back at the Opposition after the GSD accused the Chief Minister of misleading Parliament over the deal to rent office space for civil servants in the Bassadone building on Queensway.

Mr Picardo revealed the deal in response to GSD questions in Parliament recently and said 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.

The move will free up several Government-owned properties which have a “conservative” capital value of £10.2m and could “potentially” be put out to tender, the Chief Minister said at the time.

But the GSD said Land Register documents suggested the rent was in fact much higher, adding that under the deal sealed by the Government on the last working day before the 2023 general election, Bassadone Industrial World Limited would receive £22m in rent over 21 years.

That equated to just over £1m a year, or £87,000 a month, without factoring in rent increases as provided by the lease, or the cost to the Government of refitting the offices.

The GSD noted too that the same plot had been sold to the Bassadone Group for £7.5m two years earlier.

“Far from this being a good deal for the tax-payer it is now clear it is a very bad deal for the public, compounded by serious misleading by the GSLP Government,” the Opposition said.

In response, No.6 Convent Place reiterated that the agreement would provide modern facilities for hundreds of public sector workers who currently occupied offices in older buildings in need of refurbishment.

It said the GSD either failed to understand the Gibraltar rental market or was “seeking to intentionally mislead the public”.

No.6 said the Chief Minister had not misled Parliament and had specifically stated during the exchanges that the rent calculation he was providing was the rent paid to date and not the rent payable.

The Chief Minister had also stated that the deal included a year rent-free.

“This is a heinous insult by Hon Mr Bossino MP against Hon Mr Picardo KC MP and it is an allegation that should be withdrawn,” No.6 said.

“In fact, Mr Bossino was not in Parliament when these questions were taken and he may not be aware of the detail of the discussion.”

No.6 said that at £28 per square foot, the Bassadone deal represented the lowest contracted rent paid by the Government in any of its rental agreements.

That is “almost a pound” lower than any other rent paid by the Government.

“The attack from the GSD is therefore completely mistaken and an utter failure to understand the rental property market,” No.6 said.

It added that Bassadone would also contribute £1.5m to the costs of fitting out the offices which, in addition to the rent-free period, amount to £2.5m contributed by the company.

The Government also challenged criticism that the deal was bad value because the rent would amount to £22m when the plot was sold for £7.5m

No.6 said the agreement would release Government property worth £10m for sale, which coupled to the £7.5m premium for the land and the £2.5m worth of discounts meant the net cost to the Government for the next 22 years was £2m.

This “… cements the view that this is the best property deal ever done for a rental in the recent political history of Gibraltar,” No.6 said.

“This is without calculating the value of having these departments closer to each other and the rationalisation value of this as well as other synergies and savings resulting and the brilliant new space to be provided to the relevant public servants lucky enough to be moving to the new facilities.”

The Chief Minister added: "Mr Bossino is wrong in every respect in his senseless attack.”

“It is the best deal in terms of rent-free period and contribution to fit out costs.”

“It is a deal we did with a client of his represented by him and his partners at TSN which he is now criticising in a clear conflict of interests.”

“Not only did I not mislead Parliament, he is the one trying to mislead the public by presenting and untrue analysis of the figures.”

“Thirteen years to the day after I first beat Mr Bossino and the GSD in a General Election, they keep trying to lie to win public support because they cannot fault our work and our negotiations.”

“The people will continue to see through that.”

“They will note the huge conflict of interest for Mr Bossino and Mr Azopardi, criticising the work and clients of Triay Stagnetto Neish.”

“And they will see we have done and excellent deal for public servants who we are investing in, the public and the public purse.”

“It's time for Mr Bossino to apologise to me, but I won't hold my breath.”

“I have negotiated the cheapest office rental agreement for the most modern offices we have.”

“Now that’s a great deal which Mr Bossino would not be able to achieve for our people.”

EDITOR’S NOTE: A version of this article in our print edition today wrongly cited the cost of the rental agreement with Bassadone as £29.16 per square foot. It is in fact £28 per square foot, as is correctly reported in the online version of the article. The error will be corrected in print.