The GSD said on Wednesday that the Gibraltar Savings Bank’s involvement in funding the Gibraltar National Stadium project fell to the Government of Gibraltar, through the bank, “to accumulate the money for development, to not not charging fair value for the land and allowing another entity to retain the profits”.
The Opposition were reacting after No.6 Convent Place insisted the bank’s £100m investment in the stadium was ‘100% safe for depositors’ and would generate economic activity while creating a valuable asset to the community as a whole.
Together Gibraltar have also slammed the government over the investment in the stadium, insisting they were “appalled” by No.6 Convent Place’s explanations.
On Monday, the government confirmed that the GSB would invest “in the region of” £100m through the acquisition of loan notes from the GFA at an interest rate that would generate “a small but significant profit” for the bank.
No 6 Convent Place said UEFA and FIFA funds would continue to pay ‘for certain aspects’ of the stadium, adding that the original purchase of Victoria Stadium by the GFA had been completed with funds from the UEFA for £16.5m.
The government said the sum paid by the GFA to date was for sports land only, but the residential and hospitality aspects of the proposed stadium had been agreed to make it financially viable in the context of rising development costs. development and construction, and with an eye on the wider economic benefits for Gibraltar.
For the GSD, the explanations avoided key questions and were “less than clear” about the details of the scheme.
He said people would be surprised if the GSB made only a small return if it provided all or most of the money needed for the program.
He wondered why, given the residential and commercial aspects of the project, these would not benefit the GSB.
“If someone is sold public land and then wants to develop it for commercial or residential purposes, they will still have to negotiate and pay an additional sum of money – a premium – to develop it because the development of the land is a property valuable audience,” the party said in a statement.
“Rather than now reassessing the land and seeking a premium for residential and commercial development, the Savings Bank is apparently granting a ‘loan’ to GFA which will be repaid out of development profits for which GFA never paid depressed.”
The GSD questioned why other entities would be allowed to retain the profits from the stadium project and its ancillary aspects.
“Who these entities are remains deeply unclear after the government statement,” he added.
“Rather than being a good investment, it’s free money that the government gives to others.”
Keith Azopardi, the Leader of the Opposition, said the effect of the government’s explanation of the investment program was that the land had been sold at an undervaluation in 2016 and now the GFA wanted to develop a high value, high profit program which contains residential, commercial units and a hotel, the Savings Bank will finance it for only a “small” rate of interest and the government extracting no premium for the development of this asset public, allowing someone else to “pocket the profits” to which the government or savings bank should have been entitled.
“It’s a result that is clearly unprofitable and that taxpayers and savers are not getting an appropriate return on their investment,” Azopardi said.
“It’s unacceptable if that’s what’s happening, because the public has a right to get better value for money.”
“It is public funds or savers and not the government.”
The GSD called on the Gibraltar government to be transparent about how it was structuring the scheme and “precisely” who would benefit from it, and why.
He called on the government to be open about “who is pulling the strings” of Community Supplies and Services Ltd, the company the GFA said it was working with on the stadium project.
“It now seems clear that it is the government itself behind this structure in one form or another,” the GSD said.
The GSD also questioned the “staggering” £100m cost of the proposed 8,000 seater stadium.
Although there may be “local and unique factors” which affect the cost of construction in Gibraltar, the GSD said the public and GSB depositors had a right to know why a stadium of this size required so much funding.
By way of comparison, the GSD said other European stadiums of comparable size had been developed at a much lower cost.
He cited, among others, the 9,000 seater AFC Wimbledon stadium which cost £33m; Stadion Dubocica, in Serbia, which seats 8,000 spectators and costs $25 million; the 15,000-seat Stadion Wisly Plock in Poland, built for $44 million; and the 8,000-seat Stadion Arcul de Triumf in Romania, built for 37 million euros.
He also singled out La Linea’s ongoing construction of an 8,000-seater stadium for which the council was contributing €7m.
“Major questions that go to the root of value for money and who benefits from the program also arise because of this,” Mr. Azopardi said.
“People have a right to know when public assets are being sold at an undervalued price and savings bank money is being used in this way.”
Shadow Finance and Gibraltar Savings Bank Minister Roy Clinton added: “The amount of money needed for this project is staggering.
“If this is such a great project, I don’t understand why the GFA didn’t get funding directly from an external bank and had to rely on money taken from savings public.”
“The government or savings bank should publish the business plan for the proposed new stadium project, together with the financial feasibility projections and repayment period that underpin the loan notes that will be issued.”
“It must be commercially sound and independent, with no conflicts of interest, political or otherwise.”
‘The answers provided so far are lacking in detail and have left Gibraltar Savings Bank depositors uneasy despite government assurances.’
“Appalled” by TG
Together, Gibraltar said it was “appalled” by the government’s response to the issues it had raised, insisting that its initial presentation of the deal had been “opaque and deliberately sketchy”, and that subsequent explanations used “dubious arguments” to justify the use of “massive public funds”. » entrusted to the GSB by the depositors.
“The government’s PR states, in a nutshell, that Mr. Bossano knows better and shouldn’t have to clarify further,” TG said.
“With many businesses struggling and the Brexit issue still unresolved, the public should believe the government should be putting their savings at risk without further clarification.”
“This is particularly worrying at a time of great uncertainty in global markets, runaway inflation and impending recession in Western countries.”
TG said he believes GSB funds should be invested in a way that is good for Gibraltarians’ savings, “not for football”.
He wondered why the ROI of this size should be “small but significant”, asking what that meant in this context.
“The government must stop treating the public like fools and refrain from using Orwellian language in reference to this agreement,” TG said.
“There is no ‘sponsorship’, and there are no meaningful or meaningless benefits in a commercial loan.”
“It’s a business loan and a simple matter of pounds, pence and profit.”
TG added that the government had not justified why the stadium required an 8,000 capacity, adding that the most attractive international matches “barely sold out” and local matches attracted even fewer spectators.
An empty stadium would not create an attractive spectacle of football and would dampen the mood of crowds and frustrate fans, TG said.
The party was also perplexed as to why the proposed retail and housing units would be owned and managed by the GFA.
“If these developments are a good investment to warrant public ‘sponsorship’, they should remain government owned or put out to tender as is normal for any publicly funded development,” TG said.
“Together, Gibraltar is not opposed to investing in our community, but believes that such an exorbitant investment should have been made in a timely, transparent manner and after public consultation and debate.”
“At a time when public services are being slashed, basic infrastructure is either non-existent – like the promised sewage treatment plant – or in poor condition – roads, housing estates, tourist infrastructure – and the list of accommodation continues to grow. lengthen, at least this The government could consult the community on its priorities.
“Instead, what we’re seeing is more of the typical lack of transparency with a largely unknown new network of companies already brought into the deal.”
“The fact that the government views this investment as zero risk is irresponsible and a testament to its arrogance.”
“To claim that they can just avoid scrutiny because this investment is about football and has the green light from Sir Joe is an insult to this community.”
