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GSD says ‘key questions on value for money’ remain over stadium project

Image via GFA

The Gibraltar FA’s confirmation that it expects to repay the Gibraltar Savings Bank from the profits of the commercial and residential aspects of the stadium development raises questions about ‘value for money’ in the realisation of public assets that the Gibraltar Government must answer, the GSD has said.

The Opposition said the land on which project will be sited was not sold with development rights in 2016, adding the Government said that it had extracted value from the GFA by way of a premium to allow this project to happen.

For the GSD, this is “a key question” that remains outstanding.

It called on the Government to confirm whether the GFA would be retaining or using the profits of a development in respect of which it had not paid a premium for development rights.

The GSD also described as “a complete U-turn” additional confirmation that no UEFA money would be used in the project.

The party pointed out that in 2016, when the Victoria Stadium and land was bought without development rights for £16.5m, the GFA confirmed it would use an additional £15m of UEFA money to reconstruct the stadium.
It asked what had happened to that financial commitment, adding the Government had also promised in 2016 that no taxpayers’ monies would be used to fund the stadium construction.

The GSD said too that the Government “continues to be silent” about the actual extent of the “loan” being advanced by the Savings Bank for this project.

It said savers were entitled to know whether the sum would be “in the order of” £100m, as initially suggested, or a different amount.

It also asked about the Government’s use of “the opaque” Community Service and Supplies Limited structure, suggesting it was “questionable and untransparent”.

It said a statement issued by the directors of CSSL was “hardly an exercise in clarity”, adding it did not understand why it was necessary to organise public projects through charities “when these are clearly Government driven projects with planning applications signed by civil servants”.

The GSD noted too that in an interview with GBC, the GFA said that it had been advised of costs in the region of £40m for the football stadium and that even UEFA were surprised it would “cost so much.”
“So many questions remain outstanding here,” said the Leader of the Opposition, Keith Azopardi.

“The Government first said the project would cost £100m and then said that was the value and not the cost. It has not confirmed what the precise cost is. Why?”

“Is it correct that the cost of the stadium without the commercial development is in the order of £40m?”

“The fact that GFA is apparently using the profits of a high-value commercial development so as to pay the Savings Bank raises value for money issues because without paying a premium for the development rights all that is happening is that the Savings Bank is being repaid out of profits that rightly belong to the taxpayer.”

“In other words this – in effect – would breach the promise by Government that no taxpayers funds are being used to fund the project if the GFA is actually receiving an indirect subsidy by the taxpayer by not being charged a premium.”

“This deserves immediate clarity.”

“Why should the Savings Bank be restricted to a small rate of interest return of 6-7% if it is stumping up all the cash for the development?”

“Why should the taxpayer not receive a premium if the GFA want to develop the land commercially and for residential development?”

“What should be happening is that the GFA should either have paid a substantial premium to develop the land or that the taxpayer should retain the profits from the commercial development.”

“Neither of those scenarios have been confirmed by the Government.”

“This should not be left to guesswork if the taxpayer and saver is to have value for money.”

“The Government needs to make the position clear.”

“Beyond all that the continued structuring of these public projects through the CSSL structure raises many serious questions of transparency.”

“The GSD repeat our call that the financial arrangements be published so that the value for money issues can be judged.”

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