The Malta Independent 8 March 2021, Monday

Scot free from the Vitals albatross

Peter Agius Wednesday, 20 January 2021, 08:23 Last update: about 3 months ago

As we heard again this week in court, the Maltese taxpayer is forking out 250,000 euro a day to make good for the Vitals/Steward deal on our public hospitals. Following years of pressure from the Nationalist Party, Government is now clearly acting in confirmation of the PN’s criticism, that the deal was dirty and not in the national interest from its inception.

Much seems now to revolve around the price to pay to get rid of the albatross around the public health’s neck. A hefty 100 million penalty payment is, supposedly, to be paid to get our hospitals back. Such is the wisdom of government indeed.

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While all the three masterminds of the deal walk away scot free or with a bonus, the rest of us have to face the music. Konrad Mizzi walks away and has the unmitigated gall to snob court testimony with the best excuse of the moment. Joseph Muscat walks away and would not need to answer in Parliament thanks to the Speaker’s generous backing and Vitals, the hitherto unknown enterprise, walks away by selling the goose and the golden egg to Steward.

This seems to me a situation of outrageous injustice that can hardly be tolerated in a country ruled by law and legal parameters for actions of politicians and public contracts. The formal positions of government want to lead us away from that path. Muscat himself made a huge effort this week to paint the deal and all its effects as perfectly legal and legitimate. Not only did he justify, without a hint of shame, the 100 million penalty payment as a means to keep the European Commission’s nose away from the vitals pie. He also made it a point to highlight the fact that the whole deal was endorsed by cabinet – on 12 separate occasions – he said. Muscat’s message is very clear, and it is not addressed only to media reporters and their readers, it is addressed mainly to Prime Minister Abela and Deputy Prime Minister Fearne.

‘You have no way out but to ‘honour’ my deals and my legacy!’ is Muscat’s message. Prime Minister Abela and his ministers seem to be taking that message loud and clear, but should we? Is it true that we have no way out?

I say the politically unencumbered may have multiple paths leading to an exit, and some of them do actually avoid us paying hefty bills. To begin with, let us not disregard the leads in the report of the NAO.

In July last year the National Audit Office issued a report indicating that the subject of the contract in question should have been a normal services contract subject to the standard procurement rules and not a ‘concession’ agreement bypassing all the EU procurement rules.

The difference between ‘concession’ and ‘services contract’ may seem slight, but it in fact determines what kind of procedure is to be followed for public procurement. While a services contract of over 2 billion euro over 30 years would, without doubt, require publication in the official journal of the European Union and attract wide participation from specialised companies across all the 28 Member States, a simple ‘concession’ could be shared with the very few locally and with the strategically chosen abroad. Concessions were in fact excluded from the remit of the public procurement regulations at the time, hence bypassing all the applicable procurement rules.

For a hospital, a concession would have been the right instrument to hand out the handling of its cafeteria. A responsible manager would have concluded that for five to ten years, not more, to allow for renewal and open competition again in the future. Our government instead chose a thirty year concession, and not for the cafeteria, but for a hospital with all its management and investment, times three.

I remember clearly one session from my University years on the law of obligations where we learned how any obligation entered into as part of a contract which is in its turn concluded in a manner against the law is in itself illegal and thus null and void. The use of a concession for a services contract, bypassing legal rules, and the top up of a hundred million penalty to bypass EU state aid rules are all very clear indicators of an illegal objective in the whole vitals deal.

Were it free to take decisions in the best interest of the people, Abela’s government would therefore shake off all obligations from the rotten vitals deal. Instead, what it will be doing is to patch it up, careful not to disappoint the contractors, keeping the appearances that the original sin was no sin at all. Clearly, the message of their master in court this week has hit home. Clearly, we will keep paying the price, until we decide to get rid of them altogether with their billionaire concessions, their multi-million penalty payments and the hundreds of direct orders yet to come.

 

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