The Malta Independent 22 August 2019, Thursday

TMIS Editorial: Some vital questions that need to be answered

Sunday, 20 January 2019, 11:30 Last update: about 8 months ago

Following revelations earlier this week by The Shift News about the hospitals deal that saw Vitals Global Healthcare, just 21 months into its 30-year contract, transferring its concession to run three state hospitals for €70 million a year to Steward Healthcare for a paltry €1, there are some vital questions that need to be answered.

And new questions about how procurement for the hospitals has been all but ring-fenced within that company also need to be answered after it was reported how the real owners of Vitals set up a number of secret offshore companies used to fund the takeover of the hospitals' different medical suppliers.


The hospitals may now be run by the private sector but they are still state facilities and, as such, the people deserve to know what exactly is going on.

The only problem is that such answers are in very short supply indeed, unless the repeated cyber attacks perpetrated against the news website running the stories this week are to be counted as an answer of sorts.

The Vitals deal for public hospitals is as dubious as the ElectroGas deal on energy, and they were both spearheaded by the same minister implicated in the Panama Papers - Konrad Mizzi.  It appears that, in both deals, either the government has not done its homework and has been had, or it has done an awful lot of it and has had the country in the process.

And, just like the ElectroGas deal, which was highly beneficial to the country insofar as the conversion to a natural-gas fired power plant is concerned, so too the Steward deal may also prove beneficial for the country in the long run.

But in both cases, the superficial benefits of a deal are not enough to offset what has been a case of state-sanctioned daylight robbery. Nor do they offset questions about who, exactly, is benefitting from the financial machinations that were at times employed so artlessly and at other times so skilfully.

News of the secret agreement in which VGH's investors used offshore companies to fund a former sales manager's €5 million takeover of a supply company, was revealed in a previously undisclosed share purchase agreement published by The Shift News this week.

Mizzi, however, says he only learned of the deal through the media this week. He insisted that he could not intervene in the private sector's business and that he preferred various sources for the hospital's equipment and supplies rather than a single source.

But from where we stand, the fact that Vitals used secret offshore companies to hide their purchases of suppliers warrants a criminal investigation.  It could also violate European Union procurement regulations.

Earlier this week, Deputy Prime Minister and current Health Minister Chris Fearne said that plans were underway to scrap the controversial deal that granted the secretly-purchased company exclusive procurement rights for the St Luke's, Karin Grech and Gozo hospitals.

He also insisted that he did not believe in a model of procurement that grants exclusivity to a single company and that Steward was now working to reverse the contract.

This may be all well and good but the question must be asked: how was this done and how was it allowed in the first place?  Was the purchasing of supply companies always in the game plan, or did the golden opportunity merely present itself?

This, of course, all goes over and above the rest of the suspicious deal, which is being investigated by the National Audit Office.

Vitals Global Healthcare was a tiny, unknown company with absolutely no track record in healthcare, let alone in running state facilities. And, again, the company is owned by persons unknown, before this week, in the secretive jurisdiction of the British Virgin Islands and elsewhere.  But the government does not appear to be bothered about what it made from the deal, nor does it appear to be concerned about who the beneficiaries of the deal are.

Thanks to the Opposition, this case will also be investigated by the courts after Nationalist Party leader Adrian Delia took the issue to court to have the entire deal rescinded.

In this case, as in others, a company entered into a sweetheart deal with the government that saw its value driven upwards by the attractive incentives offered, and it sells out at a profit earned off the back of the Maltese taxpayer.

But when this particular sweetheart deal is eventually investigated by the Auditor General, as is planned, will it merely suffer the same fate as the ElectroGas report? Will it merely be ignored until, one day, the administration of this country, which is perhaps viewed by some as little more than a piggy-bank to be raided, is changed and real action is taken?

In the meantime, the government appears to be treating the deal like one that does not concern the public and, indeed, the public normally need not be concerned with the wheelings and dealings between two private companies, as long as they are paying the appropriate amount of tax.

But when state assets are concerned, such matters are in the public interest. And when these state assets are assets that affect a country's population on the most fundamental of levels, their very healthcare, the ante is upped further still.

Yet the people are being treated, rather insultingly, as though none of this is any of their business.

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