Disgraced former Minister Konrad Mizzi represented the government in talks for the shifting of the hospitals concession from Vitals Global Healthcare to Steward Health Care because he was “an able project manager,” former Prime Minister Joseph Muscat told the National Audit Office.
The statement emerges from the report published by the NAO earlier this month which looks into how the concession shifted from Vitals to Steward. The acquisition of the concession was formally announced by Steward Health Care in 2018.
In the process of its report, the NAO said that it sought to understand why it was Konrad Mizzi’s Tourism Ministry rather than Chris Fearne’s Health Ministry which was tasked with representing the government in the discussions for the concession which was primarily concerning public health services.
“In response to queries raised, the Prime Minister indicated that while the Minister for Health was informed of developments, the Minister for Tourism was an able project manager and that this was the reason for his involvement at this stage of the concession,” the NAO said.
The Prime Minister being referred to is Robert Abela’s predecessor, Joseph Muscat.
The Permanent Secretary of the Tourism Ministry acknowledged that “an element of ambiguity existed with respect to this project, for on one hand it was a health-related project; however, on the other hand, it was also a [Public Private Partnership] that comprised a commercial element.”
Elaborating in this respect, the Permanent Secretary told the NAO that initial discussions between the Government and Steward centred on the commercial and legal elements of the concession, rather than the health-related aspects.
The same Permanent Secretary said that the Office of the Prime Minister had a significant role in allocating responsibility for the project to the Tourism Ministry, and also gave direction to the Ministry itself.
The Permanent Secretary also attributed his ministry’s prolonged involvement in the project beyond “entry into contracts”, which the NAO said should have represented its exit from involvement in the concession, “to the several difficulties in implementation that arose.”
The general absence of the Health Ministry was confirmed to the NAO by Fearne himself, who told the office that the Health Ministry “was not involved in any manner except for the fact that he was informed of a change in the concessionaire by the Prime Minister in October 2017.”
Fearne highlighted to the NAO that he had expressed dissatisfaction with Vitals’ performance as the concessionaire and so saw the entry of Steward to take over as a positive development, “particularly in view of its reputation and track record.”
The NAO said that the Ministry only became aware of the change in concessionaire “through reporting in the media.”
“Queried by the NAO as to whether the MFH (Ministry for Health) was aware of what triggered the change in control, the Ministry indicated that it was not aware of what motivated the sale or acquisition of shares by the VGH (Vitals Global Healthcare) and the SHC (Steward Health Care), respectively,” the report reads.
However it was acknowledged that the Ministry “had no right to enquire into private matters between third parties, except for ensuring that the provisions of the concession agreements were honoured at all times.”
The report later found that Konrad Mizzi had “misled” Cabinet in order to get clearance for a side agreement which would have seen Steward receive €100 million in the case that the contract between them and the government was terminated. Mizzi has described the National Audit Office’s report into the hospitals’ concession agreement as “pure conjecture, irresponsible and blatantly false.”
The Malta Independent on Sunday earlier this month revealed that new Prime Minister Robert Abela, Fearne, and Finance Minister Clyde Caruana had initially wanted to scrap the deal with Steward but ultimately couldn’t because of the existence of the side agreement and the financial penalty that came with it.