The Malta Independent 4 August 2020, Tuesday

A Faustian pact with our health

Mark Josef Rapa Tuesday, 14 July 2020, 07:04 Last update: about 21 days ago

In 2015, the Government entered into a private-public partnership with VGH, a shell company, awarding it a concession to run three hospitals. This was made for an initial 30 years, potentially 99 years, with its owners raking in up to €70 million a year. VGH was to invest €250 million a year into regenerating the three hospitals. The Ministry for Finance was not consulted at any stage of the process up to the signing of the contract. When VGH failed to meet its legal obligations, it continued to receive money from the Government and was allowed to sell the concession to Steward Healthcare Limited for €1 in 2017. It sold for less than a coffee. Let that sink in.


The National Audit Office (NAO) concluded that the due diligence carried out by the government in awarding a concession to VGH to run the Gozo General Hospital (GGH), St Luke's Hospital (SLH) and Karin Grech Rehabilitation Hospital (KGRH) was "grossly inadequate" and that the evidence gathered indicates "collusive action between the parties acting on behalf of Government with the investors of the VGH render[ing] the entire process dubious."

In Part 1 of its audit, which took three years to complete, the NAO concluded that the collusive behaviour between VGH and government representatives should have excluded VGH from even placing a bid, let alone winning the Request for Proposals (RfP). Bank of India sanctioned funding to VGH for the ‘Malta Healthcare Projects’ on the 13th of March 2015, well before the publication of the RfP on 27 March 2015. This document was considered by NAO “as definite evidence of the VGH’s prior knowledge of the planned project and proof of collusion with the Government, or its representatives.”

NAO also makes reference to a secretive Memorandum of Understanding (MoU) between VGH and government representatives which is nowhere to be found; Robert Abela claims that no one in government has a copy of the MoU. Whether a browse in the relevant ministries and key people's servers was carried out is unknown, but evidence getting lost is nothing new with Labour in government. Remember how Keith Schembri said he lost his phone when questioned by the police in relation to Daphne Caruana Galizia's murder last November?

Earlier this year, Steward Healthcare asked the Government of Malta for more money, and disgraced former Prime Minister Joseph Muscat is said to have facilitated the meeting between the US-based company and Robert Abela. Following the publication of the audit report, Prime Minister Robert Abela said that the report from the NAO has nothing to do with the ongoing negotiations with Steward Healthcare, but if the original concession was vexatious, how can any subsequent agreements not be at the very least  heavily scrutinised for other possible illegitimacies?  The mind boggles.

While Joseph Muscat is not mentioned by name in the auditor's report, it is elementary to assume that he was crucial to the deal. The sale of hospitals (which originally only included GGH) was in the political manifesto of the Labour party in 2013. Throughout the legislature and before the issue of the RfP, Muscat's government passed through the necessary amendments and legal mechanisms, paving the way for the sale of all three hospitals. Mizzi and Muscat must have been in it together. It was Muscat who triggered the cabinet reshuffle in 2014, merely a year after being elected in Government, ousting then Minister for Health Godfrey Farrugia from Cabinet and putting Mizzi at the helm of the newly established Ministry for Energy and Health. It was Muscat who appointed Mizzi as a Minister without Portfolio in charge of 'special projects', the first of which was the implementation of the power station. And we all know how that ended.

Prime Minister Robert Abela insists that disgraced MP Konrad Mizzi has already paid his dues when he was expelled from the Labour Parliamentary Group (LPG). However, Abela's request to Konrad Mizzi to resign from the LPG came after the damning revelations on the Montenegro wind farm deal had been made public, but before the publication of the NAO report on the hospital concession deal. In other words, Mizzi was not made to leave because of his involvement in the hospitals scandal. Alas, a week has passed since the publication of the NAO audit report and, at the time of writing, the relevant authorities have still not acted on the report. 

In the last seven years, the Labour party in government has stripped Malta of its assets and, thanks to its underhand deals, the taxpayer has to now fork out billions to get services which fail quality standards. Whatever the future holds for these three hospitals, any agreement the government enters into with Steward Healthcare remains shrouded in doubt and suspicion. All along, the masterminds continue to enjoy impunity. 


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