Gibraltar Government seals Eastside deal with TNG Global valued at £330m
The TNG Global Foundation will pay £90m in cash to the Gibraltar Government for the development rights of the Eastside reclamation, in a “transformational” deal that also includes projects in the area valued at a further £240m.
The value of the agreement is estimated to be about £330m in direct cash payments to the Government and expenses that will now be shouldered by TNG Global, which has committed to projects including sea defence works, affordable housing, a marina and public parking.
Sir Joe Bossano, the Minister for Economic Development, said the project would have an economic impact of £2.5bn over the next decade, roughly the same as Gibraltar’s current GDP.
The announcement today comes just days after news that TNG Global, a foundation linked to the Vietnamese businessman who owns Trusted Novus Bank, will pay £21.2m to the Government of Gibraltar for the plot of land made up of the old Bayside Comprehensive School and St Anne’s Middle School.
The foundation has also donated the cost of the Midtown Park, which is anticipated to be paid before the end of November.
This will be the third time that a major project has been announced for the Eastside reclamation, with the previous schemes failing for different reasons.
The key difference on this occasion is that TNG Global is self-financing and the site is already under development by the Gibraltar Government.
“Third time lucky, I hope,” said Chief Minister Fabian Picardo, after the government signed Heads of Terms for the agreement with TNG Global.
“Now we have led the way by starting work on the plot with Hassan’s Centenary Terraces, I genuinely believe we have proved the value of the plot.”
“Additionally, the TNG Global Foundation is an entity that will be able to use the funding already available to it within the group to undertake the various different phases of this development without having to rely on third party funding.”
“That is what I think makes the difference with this group.”
“As a result, I think Gibraltar is onto a winner with the grant of the development rights to the Eastside Plot to the TNG Global Foundation.”
“We will receive a direct injection of capital of £90 million and will not have to put our hands into the taxpayers’ coffers for another £220 million of value for works that will now be undertaken by the developer.”
The Gibraltar Government said TNG Global was the highest bidder of all the proposals submitted for development of the site, “far exceeding” all other projects for the whole or part of the site.
TNG Global will pay the £90m once it has obtained Environmental Impact Assessment certificates for the construction of a “proposed coastal project” and outline planning permission from the Development and Planning Commission.
In addition to the cash premium, TNG Global will also undertake the following projects:
• TNG Global Foundation will immediately take over complete revetment works required for the protection of the Hassans Centenary Terraces development. The value of this to the Government is estimated to be in the region of £18m.
• TNG Global Foundation will immediately take over and complete the construction of the coastal protection works and consequent flattening of the Eastside plot by December 31, 2023. This will include the development of a marina for vessels including high value superyachts with an outer wall that will have the coastal protection effect of protecting the Eastside Plot as a whole. The outer wall will be designed to ensure direct public access to the sea and will include provision walking, cycling and fishing from specially provided platforms designed for this purpose. The value of this to the Government is estimated to be in the region of £100m.
• TNG Global Foundation will construct 400 berths for small boats that will be offered for sale or rental to persons on the Gibraltar Port Authority waiting list. The berths will the same size and proportions as those in the Mid Harbours Small Boats Marina, as will the sale and rental terms. The value of this to the Government is estimated to be in the region of £20m.
• TNG Global Foundation will construct 100 low-cost apartments for sale, a figure that exceeds all other offers submitted to the Government for the development of affordable housing in all the expressions of interest received for the Eastside plot. The apartments will be constructed within 36 months of the date of the grant of full planning permission, on a low-cost basis, with the aim of keeping sale prices to less than £3,000 per square metre. The apartments will be built to the same standards and specifications as Hassans Centenary Terraces and will be sold by TNG on the same terms and conditions and incorporating the same restrictions. They will be offered for sale by TNG with regard to such persons on the Government’s housing waiting list, or persons eligible to be on it, who are living at Catalan Bay or who have established family links with Catalan Bay and may have had to move away as a result of the absence of affordable housing in the area, always with the Government determining eligibility. The value of this to the Government is estimated to be in the region of £30m.
• TNG Global Foundation will construct a car-parking facility for general public use, with capacity for 500 vehicles and easy access and proximity to Catalan Bay. It will be owned and operated by the TNG Global Foundation and built to the same standards and specifications as the Midtown Car Park. Between the months of June, July, August and up to and including September 10 each year, the parking will be free for Gibraltar residents. During that summer period each year, residents of Gibraltar will be permitted by the TNG Global Foundation to park their vehicles free of charge under a mechanism that will produce no cost for beachgoers visits to the area. TNG Global Foundation will make parking available within the Eastside plot during the construction phase and will consult with the Government to determine the precise number and location of such parking spaces. The value of this element of the agreement to the Government is estimated to be in the region of £12m.
• TNG Global Foundation shall also assume ownership and liability for the rubble located at the Eastside plot, save for the amount of approximately 200,000 cubic metres to be removed by the Government for the purposes of constructing phase two of Hassan’s Centenary Terraces, and which is presently already been prepared to be moved for the creation of the first phase of Victoria Keys. The value of this element to the Government is about £60m.
As part of the agreement reached, TNG Global is commencing work on the necessary Environmental Impact Assessment for the coastal protection works required to protect the reclamation site, as well as the work on the revetment for the completion of the works on the second phase of Hassan’s Centenary Terraces and on the Outline Planning Permission required for DPC approval.
Adrian Olivero, a spokesman for TNG Global, said: “The Chief Minister’s announcement today has been a culmination of months of very positive negotiations.”
“We have already begun work on the necessary Environmental Impact Assessment and will soon start working on the plans we will put before the Development and Planning Commission on which we look forward to consulting with those who live around the area.”
“We are confident that the Eastside project that we will deliver will be transformational for Gibraltar, given its variety, magnitude and quality.”
“This considered, researched and well-planned journey will transform the Eastside into a hub of economic and leisure activity, providing social and economic benefit to Gibraltar on a scale that we believe will be unprecedented.”
“The obligations assumed by the TNG Global Foundation under its agreement with the Government demonstrate its commitment to the community.”
“These are exciting times for TNG Global Foundation and we are delighted to be able to pursue our vision for the Eastside with the people of Gibraltar.”
Sir Joe welcomed the announcement and noted that the Eastside reclamation was started over 30 years ago when the GSLP was first elected into government in the 1980s.
He said the agreement was “a very good indicator” of Gibraltar’s ability to attract inward investment despite the uncertainties created by Brexit and Covid-19.
“I have always believed that this area of land would have great value and I am very pleased to see that the deal we have done is going to produce £90 million of cash when the EIA and outline planning are granted, as well as a value of £220 million in other immediate investments on this site by the TNG Global Foundation,” he said.
“I estimate that the economic impact of this project on the GDP of Gibraltar would be in the region of current GDP again, that is to say, an economic impact which I estimate could be of the order of £2.5 billion pounds, spread over the ten-year development period.”
“Given the current worldwide economic climate, this is a very welcome investment at this time.”
“I know that some works will be starting immediately and that this group is self-financing, and that is a very good element of what this agreement delivers that previous parties to the development of this site have not.”
The Deputy Chief Minister, the Hon Dr Joseph Garcia CMG MP, who has minnisterial responsibility for lands, said the agreement was “important and timely”.
“We have worked to deliver a deal that is the best value to the taxpayer, that is awarding development rights to the highest bidder by far and subject to the independent DPC process which will determine the shape of the project to be developed.”
“I sincerely believe that this project comes also at the right time for our community, given the prevailing economic and public finances circumstances and I very much look forward to seeing the process start.”
“This is the second time that we award this project and the third project to be agreed, as the previous Government had also tried to get this off the ground.”
“I believe that the TNG Global Foundation, which is established in Gibraltar and has substantial assets in Gibraltar already, as well as internationally, has the substance to be able to undertake this project and to deliver in a manner that others who have been dependant on third party funding have not been able to deliver.”
“The ideas being shared by the developer are also very sensitive to the environment and to the location, so close to Catalan Bay and Eastern Beach, and to the need to consult with neighbours and work with the DPC to deliver a project that is well received by all stakeholders.”
The announcement of the heads of Agreement between the Gibraltar Government and TNG Global means works on the revetment for phase two of the development can progress without any direct cost to the taxpayer at a time when Gibraltar’s public finances are under heavy strain.
“Additionally, I am very happy to see that we will finally see the disappearance of the rubble mountain, which will be great news for residents of Catalan Bay, who will also have the benefit of the 100 affordable homes to be built on the site, more than any other proposal provided for and the availability of the small boat berths and fishing platforms, public walkways and cycle lanes to be developed,” Mr Picardo said.
“The latter will also benefit the whole of Gibraltar and in particular the residents of Beach View Terraces and Hassan’s Centenary Terraces.”
“This will be a project that, without involving any more significant reclamation works, will be hugely valuable to each and every one of the People of Gibraltar, will be sensitive to the historic and environmental significance of Catalan Bay and will be a huge driver of economic benefit to our community.”
“I know that some will say that they have heard it all before in respect of this site, but I am genuinely very confident that this time the development of the Eastside project, first conceived by Sir JoeBossano over thirty years ago, will become a reality for our common benefit as a people.”
“The effect on our public finances will not just be the payment of the cash premium of £90 million on the approval of the EIA and outline planning, but also the fact that the TNG Global Foundation will be the ones doing works which, if the Government had to do them, would cost the taxpayer an estimated £220 million more.”
“At this time, having had to spend so much taxpayer’s money during the pandemic, this is a hugely important cash payment and investment.”
“Additionally, I want to emphasise that the TNG Global Foundation has submitted the highest bid for the Eastside which the Government has received.”
“This is therefore the best deal for the tax payer by far and will have great benefits to the community as a whole beyond the direct cash and investment income and the GDP effect.”
“Given the prevailing political and public health circumstances that surround us, this is, in particular, a huge vote of confidence in Gibraltar and its economy which every single Gibraltarian should be proud of, whatever their party political allegiance may be.”
“This is for all of us, not just for some of us and it should be celebrated by all of us and not just by some of us.”