£90M CASH PAYMENT
£18M VALUE OF REVETMENT WORKS FOR HASSAN CENTENARY TERRACES
£100M VALUE OF REVETMENT WORKS FOR THE WHOLE OF THE EASTSIDE
£30M VALUE OF 100 AFFORDABLE HOMES FOR SALE AT NO MORE THAN £3Kper sqm
£20M VALUE OF 400 SMALL BOAT BERTHS PROVIDED FOR PORT WAITING LIST
£12M VALUE OF FREE PARKING IN SUMMER RETAINED
£60M VALUE OF REMOVAL OF RUBBLE FROM EASTSIDE
£2.5 BILLION APPROX ECONOMIC IMPACT OVER 10 YEARS
Her Majesty’s Government of Gibraltar has announced that it has signed Heads of Terms for an agreement for the development of the Eastside Reclamation.
The development rights over the plot have been awarded to highest bidder, The TNG Global Foundation. The premium payable by the TNG Global Foundation will be the payment in cash of £90,000,000.00 (ninety million pounds sterling), upon
(i) the grant of the Environmental Impact Assessment certificates for the construction of the proposed coastal protection project, and of the Eastside Project, and
(ii) receipt of outline planning permission for the Eastside Project.In addition to the cash Premium, TNG will provide the following additional consideration:
(a) TNG Global Foundation shall immediately take over and undertake and complete the revetment works required for the protection of the Hassan Centenary Terraces (HCT) development (Revetment Works). The value of this to the Government is estimated to be in the region of £18,000,000.00 (eighteen million pounds sterling) which is a cost that the Government will not now have to pay.
(b) TNG Global Foundation shall immediately take over and undertake and complete the construction of the coastal protection works and consequent flattening of the Eastside Plot by 31st December 2023. This will include the development of the 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 that citizens have direct access to the sea from it, and will include provision walking, cycling and for fishing from specially provided platforms designed for this purpose. The value of this to the Government is estimated to be in the region of £100,000,000.00 (one hundred million pounds sterling) which is a cost that the Government will not now have to pay.
(c) TNG Global Foundation shall construct 400 berths for small boats (Berths). In relation to the Berths, TNG Global Foundation shall offer these for sale and/or rental to persons on HMGoG’s Gibraltar Port Authority waiting list. The Berths shall be of the same size and proportions as those in the Mid Harbours Small Boats Marina. Additionally, the conditions for sale and/or rental of the Berths (including rental rates, sale prices and general restrictions) shall mirror those existing from time to time in respect of the Mid Harbours Small Boats Marina (save as may be agreed by HMGoG and TNG from time to time). The value of this to the Government is estimated to be in the region of £20,000,000.00 (twenty million pounds sterling) which is a cost that the Government will not have to pay.
(d) TNG Global Foundation shall construct 100 low-cost apartments for sale (Apartments). This exceeds all other offers submitted to Government for the development of affordable housing in all the expressions of interest received for the Eastside Reclamation. The Apartments shall be constructed within 36 months of the date of the grant of full planning permission for the Apartments, on a low-cost basis, so that sale prices will amount to less than £3,000 per square metre (or such reasonably higher price as HMGoG may agree). The Apartments will be built to the same standards and specifications as Hassan Centenary Terraces. The Apartments will be sold by TNG, on the same terms and conditions, and incorporating the same restrictions, as exist with Hassan Centenary Terraces. Additionally, the Apartments will, in priority, be offered for sale by TNG with regard to such persons on HMGoG’s housing waiting list, or persons eligible to be on HMGoG’s housing waiting list, who, at the relevant times, 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, and always with the Government determining eligibility. The value of this element to the Government is estimated to be in the region of £30,000,000.00 (thirty million pounds sterling) which is a cost that the Government will not have to pay.
(e) TNG Global Foundation shall construct a car-parking facility for general public use, with capacity for 500 vehicles (the Parking). The Parking will be constructed by TNG Global Foundation at the Eastside Plot, in the area where this was required in the HMGoG expressions of interest, with easy access and proximity to Catalan Bay, and will be owned and operated by the TNG Global Foundation. The Parking will be built to the same standards and specifications as the Midtown Car Park. TNG Global Foundation shall be free to operate the Parking so that between the months of June, July, August and up to and including 10th September in each year it 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 at the Parking FREE OF CHARGE under a mechanism that will produce no cost for beach goers visits to the area. Additionally, throughout all relevant stages of the development of the Eastside Project prior to the construction of this parking, the TNG Global Foundation shall make available within the Eastside Plot and during the summer period in each year, parking spaces with access and proximity to Catalan Bay. HMGoG and TNG Global Foundation have agreed to continue to consult closely from time to time to determine the precise number and location of such parking spaces. The value of this element to the Government is estimated to be in the region of £12,000,000.00 which is a cost that the Government will not now have to pay.
(f) TNG Global Foundation shall also assume ownership of 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 2 of Hassan 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 – as a result of our not having to move the rubble to flatten the Eastside plot – is estimated to be in the region of £60,000,000.00 which would have been the cost of moving the rubble that the Government will not now have to pay.
The total direct value of the project to our community is estimated to be in the region of a total of £330,000,000.00 (three hundred and thirty million pounds sterling) in direct cash payments to the Government, expenses which the tax payer will not have to shoulder and value of projects which the Government would otherwise have wished to undertake.
Additionally, the economic impact of the project over the next ten years is estimated by Sir Joe Bossano to be equivalent to the whole GDP of Gibraltar again, ie approximately £2,500,000,000.00 (two and a half billion pounds sterling).
As part of the agreement reached, the TNG Global Foundation is IMMEDIATELY starting 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.
The TNG Global Foundation was recently established in Gibraltar by Mr Tuan Tran, the ultimate beneficial owner, also, of Trusted Novus Bank. Trusted Novus Bank, which is part of the same group, has recently committed to make a donation to Gibraltar of the cost of the Midtown Park, which is anticipated to be paid before the end of November.
Last week the Government also announced that it had granted development rights over the old Bayside and St Anne’s plots to TNG Global Foundation.
Adrian Olivero, a spokesperson for the TNG Global Foundation, said: “Following on from last week’s announcement of the award of the old Bayside/St Anne’s plot to TNG Global Foundation, we are very pleased to have now concluded negotiations with HMGoG for the award of the rights to develop the Eastside. 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.”
The Minister for Economic Development and Inward Investment, the Hon Sir Joe Bossano KCMG MP said: “I am very happy to see the agreement of Heads of Terms for the development of the Eastside reclamation. We started that reclamation over thirty years ago when we were first elected to Government in the late eighties. 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 £240 million in other immediate investments on this site by the TNG Global Foundation. 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. Given I am also the Minister for Inward Investment, I am happy to say that this is also a very good indicator of Gibraltar’s ability to attract inward investment in spite of the uncertainties created by Brexit and COVID.”
The Deputy Chief Minister, the Hon Dr Joseph Garcia CMG MP, who has Responsibility for Lands, said: “This is an important and timely agreement which I have been very pleased to negotiate together with the Chief Minister. We have worked to deliver a deal that is the best value to the tax payer, 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 Chief Minister, the Hon Fabian Picardo QC MP, said: “This is the third time Gibraltar tries to finalise the start of works on the Eastside project. Third time lucky, I hope! 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 tax payers coffers for another £240 million of value for works that will now be undertaken by the developer. This is excellent news, in particular for the purchasers of Hassan’s Centenary Terraces, as the works on the revetment for Phase Two of that development will now be able to progress immediately without any direct cost having to be met by the tax payer at this particularly difficult time for our public finances. 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. 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 Joe Bossano 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 £240 million more. At this time, having had to spend so much tax payers 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.”