In September Fage dropped plans to construct a yoghurt factory in the south of Luxembourg after several complaints and an investigation by the public prosecutor found the firm paid $53m in consultancy fees to a company tied to the family behind Fage. It prompted an investigation by the Court of Auditors that exposed serious shortcomings in the way the economy ministry had developed the project with the firm.

Speaking to parliament’s Budget Execution Committee on Monday, economy minister Franz Fayot (LSAP) said that the bill of law would implement recommendations from the Court of Auditors, whose January report found there was no documentation of the negotiations between the ministry and firm relating to the sale of a plot of land and how the €30m price was agreed in 2016. The economy ministry, at the time headed by Etienne Schneider (LSAP), pictured below, also failed to inform the finance ministry of its plans or explain why it didn’t simply lease out the land, which is common practice for industrial sites owned by the state.

February 2020 archive photo shows Etienne Schneider the day he stepped down from government. Photo: Jan Hanrion/archives

Under the draft law, future procedures would be “documented and archived in a more structured manner”, Fayot explained. The bill also calls for the establishment of an interministerial commission that will have to submit an opinion on projects before they are approved.

And the law would outline criteria under which the state may opt for the right of lease or the right of sale. One MP wanted to know if the sale of land will remain the rule in the future or if the government intends to change its approach. Fayot made it clear that the right of lease will remain the rule and that land sales should remain the exception.