Government takes over as affordable housing schemes collapse

The OEM affordable housing schemes are in trouble - and the Government has had to step in to try and save the Cumberland Terraces, Bayview Terraces and Nelson's View projects, the las mentioned in the already controversial Rosia Tanks site.

A Government spokesman said last night: ?The Government has moved quickly to prevent delays in the development and to protect the interests of the purchasers to whom GRP Investment Company Limited will shortly write a clarifying letter?.

The Government view is that "following the failure of OEM (International) Limited to satisfy the Government that they have sufficient funding available to finish the Nelson's View, Cumberland Terraces and Bayview Terraces affordable housing schemes, the sites have been repossessed by the Government."

The Government?s wholly owned Company GRP Investments Company Limited has taken over the developments, and will now complete Purchase & Sale Agreements with the Purchasers of the flats. There is no change to the development Schemes. The contractor and design professionals will continue without interruption, said No.6 Convent Place.

The news is not entirely unexpected. Last October PANORAMA published a report on a row concerning what we described as "The OEM millions", and asked the question: Will housing projects be affected by this dispute?

The dispute concerned a case in the Supreme Court.What OEM lawyers said at the time was that what had led to their clients application in court was "a disputed claim by a director of the present trustees to a beneficiary interest in the shareholding of OEM International Ltd, the company carrying out the Nelson's View project among others."

It was also being said then that unless there was a satisfactory solution, the funding of projects might stop.

It was in October 2005 when a statement was issued announcing these major projects: "The Government and OEM (International) Limited are pleased to announce developments on three sites that will provide up to 900 affordable apartments for sale to local buyers."

Up to 200 flats were to be built at the site of the old Rosia Tanks to be known as Nelson?s View; up to 200 flats at the site of the ex-Cumberland Building in Cumberland Road to be known as Cumberland Terraces; and up to 500 flats at North Gorge to be known as North Gorge.

A Government statement at the time said: "The Nelson?s View and Cumberland Terraces developments will be ready by September 2007, and the North Gorge Development by March 2008."

It was clear that there had already been substantial delays and these deadlines could not be met. In fact, the Nelson's View and Cumberland Terraces deadline of September has not been met, and the projects are in their early stages of construction. The whole issue is now compounded further by the latest developments announced last night.

The premium payable to Government for the above amountsed to ?15 million (which includes a ?1m donation to a social project, the elderly swimming pool).

There was also reference at the time to a modern, workers hostel being built, but nothing further has been heard about it.

Mr Robert Noonan, Chairman of OEM International Limited, said then: ?I have been involved with Gibraltar for over 12 years and via my Irish Trusts, with the benefit of the corporate professional facilities available in Gibraltar, build up a property portfolio of considerable proportion.

"In the International market place, I have been involved in 3 publicly quoted companies with an aggregate value of ?500m.

"Our Gibraltarian architects and engineers have designed these 3 property schemes for both low cost housing and high value properties in Gibraltar using modern construction techniques. The system comprises of a factory made steel frame work, designed for time efficient construction and maximum durability in terms of external finishes."