Parliament this evening debated the concession awarded by the government to Vitals Global Healthcare for the operation of three state hospitals, which is now said to have sold off that concession to American based Steward Global Healthcare.
Last month, Vitals Global Healthcare, the company which was entrusted with the provision of healthcare services in the Gozo, Karin Grech and St Luke's hospitals, sold its concession only 21 months after securing a deal with the Maltese government.
The deal has long been the source of controversy with the Opposition consistently calling for the full publication of the contract between the government and VGH, instead of the heavily redacted version presented in Parliament last year.
Curiously, a VGH spokesperson said the deal is still being negotiated while the government has insisted that the deal is final, despite claiming not to know how much VGH made off the sale or that it does not interfere between two private entities.
The government proposed a parliamentary debate in the house following the Opposition's call for a discussion to take place over the agreement within the Parliamentary Committee for Health.
Government argued that it should be discussed in the plenary to reflect the issue's importance while the Opposition has called on the Health Committee to be the platform of discussion because of the possibility of calling witnesses.
The Medical Association of Malta has called the deal with VGH "fishy" (fazulla), especially when viewing what little refurbishment and construction works carried out on the three state hospitals despite receiving €34 million from Parliament in 2017.
18:47 Health Minister Chris Fearne
Fearne said that the credentials of Maltese and Gozitan doctors and medical sector workers speaks for itself.
“Originally, when we speak of funds, Mater Dei Hospital was supposed to cost LM40 million, it wound up costing €560 million. That is the difference. Let us not play that we are innocent, and that things are happening today which never happened before.”
Fearne said that many problems within Mater Dei Hospital have been corrected through this government.
He described how the many problems plaguing various hospitals around Malta and Gozo, inclusive of the three hospitals given away in the concession agreement, require heavy capital investment.
Fearne said a mixture of sources have been engaged to bring in funds to modernise Malta’s healthcare system across the board. Some sources came from European funds, others came from government coffers, and a Public Private Partnership has brought in private investment.
He called into question the suggestion for government to enter into more debt, leaving generation after generation to foot the bill of today.
Referring to the big sums of money paid by government for the VGH air ambulance, he said that it is used every week and has saved lives.
Fearne challenged Delia to say how much is spent on Mater Dei Hospital per day, after Delia had expressed his shock that the government is paying €190,000 per day for Gozo General Hospital and Karen Grech.
Delia said he was not prepared for such a question, but that money spent on Mater Dei Hospital is accounted for and the people are getting a service.
Fearne told Delia that €2 million is spent on healthcare in Malta every day, and accused the opposition of wanting to prevent Gozitans from receiving the same quality of care that Maltese received. Delia vociferously denied this.
Fearne turned to the issue of the VGH concession being sold to Steward Global Healthcare.
He stressed that the conditions of the contract must be strictly adhered to and acknowledged that VGH has faced problems such as delays in acquiring the appropriate Planning Authority permits for development.
“We told VGH to speed up the works or find a solution. Their solution was to sell off the shares to Steward Healthcare. We saw that this further strengthened the deal, we performed our due diligence, they have a huge track record, and we are confident”.
In the coming days, we will announce how Bart’s Medical School is increasing operations in Malta which shows the faith it has shown in our healthcare.
“We have made huge strides in the healthcare, and will continue to do so for years to come”.
Fearne said he would be willing to show the VGH contract to Adrian Delia after the Steward sale goes through.
18:29 PN Leader Adrian Delia
Delia highlighted the secrecy around the ownership of VGH. He gave a chronological overview from when the VGH deal was announced in the public domain to all the development that have been made since then.
He spoke of how difficult it was to study the contract due to the heavily redacted parts. He reminded the House how then Health Minister Chris Fearne asked the Auditor General to investigate the deal.
“Nobody knows who owns VGH.”
It was then announced that VGH will be paid €200 million over 30 years, he said.
“From today alone, we are paying VGH €190,000. Yesterday we paid €190,000 and tomorrow we will be paying €190,000 and we have received nothing in return”.
Delia highlighted how VGH was sold 11 days before EU anti-money laundering rules came into play requiring the true ownership of VGH to be revealed by law.
“When a person has a piece of land, if he is going to sell it, they would receive money in return. Instead, this land in question inclusive of all the equipment, the government was given €1 in return”.
On the day when the deal was announced, Delia said that the opposition could not say that work would not be carried out by VGH despite receiving parliamentary funds.
“Today we can say it. Work on Bart’s Medical School did not happen. Work on St Luke’s Hospital did not happen. Work on Karen Grech Hospital did not happen. This is a fishy deal, with conditions not having been met.”
“VGH, which does not have one day of experience in medicine is supposed to be improving our healthcare. This government is in the business of awarding contracts to companies with no experience in the sector they are tendering for.”
Delia said that Health Minister Chris Fearne knows that the deal is bad, and has said it himself.
“Fearne can make two choices: selling Malta to others, one more time, or sign to bring back these three hospitals back to the Maltese and Gozitan. We believe in the Maltese and Gozitan doctors and medical staff. We want the hospitals back. Fearne, with the stroke of a pen, can bring back our hospitals. The responsibility is on his shoulders”.
18:13 PD MP Godfrey Farrugia
Farrugia began by saying that nobody can accuse him of being negative, having never formed part of the PN and having been a cabinet member of the PL.
“The people of Malta and Gozo, practically always decide to pay from their own pocket than go to the Health Centre. This complements the argument of privatisation. We always speak about the PPP, but what about the social partners who have an interest in leading inpatient care.”
Farrugia slammed the “savage way” that Steward Healthcare deals when negotiating, a testament to what it’s bottom line is. He delivered a number of points as to how the contract entered into does not favour VGH, which begs the question why it would enter into the deal in the first place if not for dubious reasons.
18:07 Silvio Parnis
Parnis gave an overview of the healthcare achievements the PL government has achieved, such as removing out-of-stock medicines, waiting-times for procedures, slamming the PN for bringing Malta to its knees through mismanagement of the building of Mater Dei Hospital.
He said that he will not be convinced or lectured by PN MPs after the mess they left Malta’s healthcare system in.
“The PN has the biggest problem: it cannot handle seeing billions of investment coming to Malta thanks to this government”.
18:00 PN MP Claudette Buttigieg
Buttigieg proceeded to give an analogy of what the privatisation of three public hospitals implies in order to simplify the issue at hand.
“Government made a deal, with a company named VGH, led by a man called Ram Tumuluri who is burdened by a dark story in Canada. Everyone warned the government not to trust these people. These hospitals are there for all of us.”
The Prime Minister is saying the opposition are not reading the numbers well, she said, adding that she would like to remind the PM that opposition has not read the numbers because government redacted them when they partially published the contract.
“What if the president of a society decides to sell a club house to an unknown person, with everybody saying that this idea is a dubious one. The decision to be stubborn and go ahead with the sale of a club house that does not even belong to the president in the first place begs society members to wonder if the president is profiting off this deal”.
17:54 PN MP Simon Busuttil
Busuttil started off by saying he will explain why this deal has been planned from beginning to end. He asked if Minister Konrad Mizzi, together with the PM’s chief of staff Keith Schembri, have anything to do with the offshore company 17 Black. He asked if the pair had anything to do with the sale of concession between VGH and Steward Healthcare, behind the people’s back.
“Three public hospitals have been privatised. In the case of Gozo, it is the only hospital of Gozo and the deal was made behind everybody’s back. The agreement was made before the tender was finalised. Government gave the hospital to the unknown people of VGH.”
Busuttil questioned how VGH is without money after it sold the apparatus in the three public hospitals it was given by government. He reiterated how VGH did not meet a single deadline.
“We do not even know if the concession transfer was made or not”. He was referring to conflicting statements by a VGH spokesperson and the government over whether the concession transfer has been finalised or not.
“This deal was not made in the interest of the patient, but in the interest of Ram Tumuluri [VGH CEO] and whoever is behind him. Government should immediately stop this dubious, fishy, pre-planned, corrupt deal and take back the three hospitals”.
17:46 PL MP Silvio Grixti
Grixti said that the government received three bids for winning the healthcare concession, meaning that the government was able to shop around for the best deal.
He defended the government’s decision to publish the contract with redacted sections due to commercially sensitive information.
He echoed what the PL has been saying for years, that the opposition is being negative about any deal the government enters into.
Grixti, who leads the Parliamentary health committee, said the success of this project will be measured from the progress made and the results garnered as a consequence of this concession agreement.
He went on to say that the government is convinced that the transfer of concession from VGH to Steward Healthcare continues to strengthen the overall health agreement and provides value added to the Maltese and Gozitan economy.
17:39 PN MP David Stellini
Stellini relayed a message of the former PN leader Simon Busuttil, where he promised that if the PN government was elected the three hospitals would be returned to the state. The new PN Leader Adrian Delia also expressed the same sentiment.
“This is because the PN believes in Maltese and Gozitans in running a fantastic healthcare”.
He questioned why the government does not want to publish the full contract entered into with VGH.
Stellini made the argument that the agreement with VGH is no longer valid, both from a commercial and a legal standpoint, therefore the opposition questions why the government has remained stubborn on publishing the full agreement.
He made reference to a Times of Malta report whereby it claimed that if the concession agreement was broken earlier than its pre-determined time-frame, the government would have to pay out €80 million.
Prime Minister Muscat, in his intervention, said this was not a correct analysis.
“We know that this deal, thanks to remarks made by Health Minister Chris Fearne last December, is no longer valid.”
17:31 Gozo Minister Justyne Caruana
Caruana questioned where all the opposition MPs where while they spent 25 years in government with regards the issue of healthcare in Gozo.
She passionately criticised the Opposition how it completely ignored the Gozitan healthcare and now it has all of a sudden shown great concern now that it is in opposition.
Caruana commended PD MP Godfrey Farrugia for, when he was a Labour Health Minister, bringing in chemotherapy services to Gozo.
She gave an overview of the numerous basic health care services which Gozitans were deprived on for many years.
“We want a new hospital. We want Gozo to have the best healthcare. We do not want the government to enter into more debt. There is no turning back because we do not want Gozo to return to third-world healthcare services”.
She described how when she had complications with her pregnancy the services available in Gozo were not adequate. She gave an overview of all the new services introduced under the past two Gozo administrations and stressed that this is the best deal for investment to be brought in without creating a huge dent in the government’s coffers.
17:25 PN MP Chris Said
Said began his intervention by stressing that if any section of people have reason to call into question the concession agreement, it is the people of Gozo.
He highlighted how the conclusions of the Auditor General investigation will come so late in the day because of a heavy back-log, that the issue would be forgotten and any wrongs will not be corrected as it should.
Said also highlighted, like his colleagues before him, how VGH missed deadline after deadline according to the concession contract it signed with the government.
“The most important thing in a hospital is service. This week I met with a doctor who works at Gozo General Hospital who told me that if anything happens to you or your family, run to Mater Dei Hospital. Vitals does not even have money to change the wipers of their ambulance. And when we bring this to the government’s attention, it argues that it does not get into the operations of a private company. Incredible”.
Gozo General Hospital must not be privatised, and the government must do everything in its power not to lose Bart’s Medical School.
17:18 PN MP Fredrick Azzopardi
Azzopardi reiterated the opposition MP’s previous claims that it is not against privatisation.
“The opposition describes this transfer of shares as a perfect example of non-transparency and non adherence to good governance practices”.
He called on the government to answer many pertinent questions relating to the concession agreement.
Azzopardi stressed that questions of corruption will not go away without full transparency of the concession agreement.
He stressed that the company is ‘secret’, since the beneficial owner behind its ownership is sheltered by many structures and remains a secret.
“The contract with VGH was a scandalous deal which should have been revoked when it became apparent that a number of shortcomings persist. From how things are progressing, it became clear that no mistakes were made but it was all planned out well for the mysterious person who made millions off the back of the Maltese people.” He was referring to how the concession agreement sold by VGH to Steward Healthcare has been made for an undisclosed sum, with the true owner behind VGH remaining a mystery.
17:10 Tourism Minister Konrad Mizzi
Mizzi began his intervention by calling out all that was substandard in the healthcare system when the PL was elected to power in 2013.
Mizzi slammed the PN for choosing to invest in Mater Dei Hospital, and ignoring all other hospitals in Malta. He gave an overview of what led to the decision to choose a Public Private Partnership model to invest in Karen Grech Hospital, St Luke’s Hospital and Gozo General Hospital.
He said that after lengthy analysis, it was found that this PPP model was found to be the most efficient, and that after further analysis it became apparent how much benefit refurbishing the aforementioned three hospitals would bring to the Maltese people.
Mizzi went on to say that throughout the concession agreement, capital risk, meaning capital overruns would be shouldered by the private sector.
He gave an overview of particulars within the concession agreement, as the minister responsible for Public Private Partnerships.
“Government did its due diligence, it went to the cabinet and the cabinet gave its consensus for the share transfer to go through”.
He called the deal innovative and that other countries will soon adopt.
17:04 PN MP Claudio Grech
Grech began his intervention by saying that Malta enjoys a quality and modern healthcare system which serves the people well.
“It is surreal to hear the government speaking in this way. It is a party that should have socialist values, that should have workers’ values at heart. It is the Labour Party which should have problems saying it is a party with socialist values”.
Responding to the PM’s statement, Grech said that this is what we stand for: “We are against privatisation when the companies involved are private equity, where the sole goal is profit. We privatise our healthcare system to companies who have a motive to provide quality healthcare.”
Grech said that Steward Healthcare is one of the most involved companies which engage in leveraged buy-outs. It’s only goal is profit and its position on the stock-market.
“We are against this type of privatisation because of its nature. Government never had a mandate to do this. The way it privatised the three hospitals the government carried most of the risk. The PN were pioneers in engaging in the private sector for our healthcare.”
Grech said he felt shocked at the PM’s words when it said the opposition was against privatisation when the PN had started engaging the private sector successfully in Malta’s healthcare. The way in which this privatisation deal was done however leaves much to be desired.
16:55 PL MP Alex Muscat
Muscat said that the Opposition is confused, where on one hand it says that it is not against privatisation whereas on the other is says that VGH should pack its bags and go.
He remarked that the message being sent to prospective investors looking to invest in Malta by the Opposition is that after negotiations and the signing of a legal contract with a private company, the government will then tear up the contract.
“The opposition wants the government to breach a contract which has so far been adhered to. It wants us to break the contract not just in the health sector, but in the education sector [American University of Malta contract].”
Muscat said that the level of healthcare in Malta is among the best in Europe. He slammed the opposition for being against medical tourism.
He also slammed the opposition for suggesting that the government should enter into debt in order to provide the funds for investment to refurbish and maintain the three hospitals in question, on the premise that it interest rates are currently low.
“Opposition wants to further indebt us off the backs of the Maltese people”.
Muscat said that the opposition is against all investment coming from outside, referring to the controversial cash-for-passport scheme, Crane Currency, Electrogas and more.
He concluded by saying the government has nothing to be ashamed of and is working to ensure quality healthcare for generations to come.
16:43 Shadow minister for Health Stephen Spiteri
Spiteri remarked that the Opposition is not against improving the current healthcare situation.
“One must question, after all things considered, why the government decided to privatise these hospitals. When one considers this aim, it is either because of poor service, lack of quality services, financial reasons or a problem with workers. We do not think that any of these reasons are valid. The government can only answer this question”.
He said that when one considers the Gozo General Hospital, the only one on the island, the private sector which will make up the administration of that hospital, its main aim would be profit and not providing the best possible care. He said that how can it be assured that this private company will not employ cost cutting matters?
Spiteri drew attention to the fact that it is not only the Opposition that has come out against the deal, but that unions such as the Medical Association of Malta have called it into question.
He slammed how the contract published by the government relating to VGH was heavily redacted, with the justification being that redacted parts contained commercially sensitive information.
“Pressure from the Opposition has continued to be piled on. This contract should be published in full, as the people have a right to know what this deal will mean for Malta’s healthcare.”
He referred to the condition that the government is tied to paying €70 million per year to VGH to run and operate the three hospitals in question.
“The government is obliged to pay rent for some 700 beds off VGH each day, even when less is needed on a less busy day. Government is playing €1 million per year for patients to be transported between Malta and Gozo via an air ambulance.”
Spiteri said that VGH had to build the Barts Medical School which had to be completed by July 2017.
He remarked that VGH has missed many pre-arranged deadlines, and that the Opposition is not against involving the private sector in Malta’s healthcare. What the Opposition is firmly against is engaging a company with no experience in the health sector, where the UBO of that company remains a mystery.
Spiteri also demanded that the public is made aware of the agreement entered into between VGH and Steward Healthcare. It was revealed that VGH sold the concession agreement to an American based company Steward Healthcare, just 21 months after it was awarded the concession by this government.
He slammed how VGH did not maintain, refurbish and carry out necessary works at the three hospitals despite receiving such exorbitant funds from parliament.
16:32 Prime Minister Joseph Muscat
Muscat remarked that the issue of health care is centred on “credibility”. He commented that Malta’s healthcare was cumbered by the weight of time, and that while it was relatively good the strategy has always been “piece-meal”.
“Our healthcare was not keeping up with the change in the sector. It was not keeping up with the needed changes in management-style that modern day healthcare requires”.
He quickly jumped to a big issue which plagued the last Nationalist Party government: out-of-stock medicine.
“In this day we do not have this issue anymore. Today, thanks to the vision of this government, the problem of out-of-stock [medicine] finished once and for all. In the same way, thanks to new practices and invest. The waiting time of operations and procedures has been reduced drastically”.
He questioned what the Opposition’s attitude on our healthcare is.
“We believe, unequivocally, that the private sector with European regulations in place, the private sector is a strategic partner of the government at every stage. We will continue to engage in the private sector because we believe in the private sector?”
He questioned whether the Opposition believes in the private sector.
Muscat referred to the Opposition’s argument where it slams the involvement of the private sector in Malta’s healthcare.
“One of the biggest changes in Malta’s healthcare was the involvement of the private sector for the provision of homes for the elderly. The government of the day [A PN government] turned to the private sector to build and manage homes for the elderly. Nobody questioned the private sector’s role when this decision was taken. Why has the Opposition’s position changed nowadays?”
He said that a crucial point is that the Opposition’s critique is “blind critique”.
“They [the Opposition] do not know what it stands for?”
He said this is a crucial part of the debate and must be central to today’s discussions.
Muscat slammed what he called misinformation, such as the government must pay out €80 million if the transfer of the concession ends earlier than stipulated.
“Whoever is saying this does not understand what they are saying,” he said. Muscat spoke of how Karin Grech Hospital was abandoned, the same goes for St Luke’s hospital, and that Gozo General Hospital desperately needed investment.
He said that in order to bring this investment through government coffers, it would take 30 years before improvements would be seen.
Muscat said that whoever is reading the numbers has not understood and proceeded to give an overview of how the government has actually brokered a feasible deal.