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Housing estate question prompts exchanges on profits – and losses

Chief Minister Fabian Picardo yesterday told parliament that the Gibraltar Government made a profit of over £1 million on the two affordable housing estates, in exchanges that dredged up losses incurred by the former GSD government in respect of earlier housing developments.

This comes as Mr Picardo was quizzed by Independent MP Lawrence Llamas as to losses incurred in the development of Mons Calpe Mews and Beachview Terraces during yesterday’s question and answer session of Parliament.

He told Mr Llamas that the Government had in fact made a profit of £1,039,204 from those developments which, he added, sold for £108 million.

Pressed by Mr Llamas, the Chief Minister acknowledged there were a number of factors which, if factored into the bill, could tip the balance into loss.

But he added that calculating the bill as a developer would - meaning excluding costs such as upgrades to public infrastructure – the outcome was a profit for the taxpayer.

Mr Picardo then flagged a number of examples of housing developments that had given rise to a loss under the previous GSD administration.

This included Waterport Terraces where, he said, there was a ‘direct loss’ of £7 million.

“In fact there’s a claim against the Government of Gibraltar of 26 Million Euros presently being adjudicated in the Spanish courts in Madrid by Gibralcon,” Mr Picardo said.

He highlighted a further loss of £19 million in respect of the Cumberland, Bayview and Nelson’s View developments including a loan of £4 million in tax payer’s money to OEM that had to be written off.

“Not like the Sunborn loan which has been fully repaid,” Mr Picardo added.

Additionally, there was a £7 million claim against the Gibraltar Government by Barclays bank through the liquidators of OEM, he said.

“So, Mr Speaker, there have been direct losses, even when you do the calculation the same way I’ve done them, but not in the estates developed by this administration,” he told MPs.

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