Taking the horse to the water

The ultimate objective was for the government to assist CIC open a business accelerator branch (possibly at MCAST) and start to share its international connections. Alas, the seed fell on fallow ground and to date no flowers have blossomed

Joseph Dalli (right) with former prime minister Joseph Muscat
Joseph Dalli (right) with former prime minister Joseph Muscat

A confidential WhatsApp exchange was sent to Lovin Malta by Joseph Dalli, (pictured above on the right with Joseph Muscat) who served as Malta’s commercial representative to the US and Canada between 2014 and January 2017. Dalli said he considered himself to be a personal friend of former prime minister Joseph Muscat and he cautioned him not to sign the hospital concession deal with VGH.

Last week, in a historical decision in a case initiated by former opposition leader Adrian Delia, the court annulled the contracts with VGH and Steward Healthcare, declaring the deal to be “fraudulent”. The court ordered St Luke’s, Karin Grech and Gozo hospitals be returned to the government within three months. Here enters the unsolved enigma - who was the author of a secret MOU suspected to be signed by Malta Enterprise (ME) before the resuest for proposals (RFP).

The damning thing was that against accepted procurement rules it was given by the government to Vitals six months before the RFP for the hospitals’ privatisation was issued. One of the suspected signatories was Mario Galea, appointed CEO of Malta Enterprise (ME) on 28 June 2016.

What is the role of Malta Enterprise in connection with attraction of foreign investors such as Vitals and others? Its role during Mario Galea’s watch was to strengthen existing businesses, both local and foreign. For example, in attracting Crane Currency allegedly introduced by Keith Schembri (then chief of staff) Malta Enterprise and the government committed to guarantee Crane Currency an unprecedented 75% of a BOV loan of €72 million – roughly €54 million – in 2021 to finance machinery while Malta Enterprise approved the State financing of a €27 million factory in Hal Far.

Did Malta Enterprise then headed by Galea give preferential treatment to Crane Currency?  Muscat said he denied giving any special treatment. Crane Currency was purchasing printing equipment manufactured by Komori, and these were distributed locally by Muscat’s chief of staff Keith Schembri’s on behalf of his company Kasco.  More, controversy surrounded Crane Currency printing operations in Liberia, yet so far Crane Currency has rebutted such allegations, saying it has not been charged with any crime.

Moving back on to the Vitals billion-euro hospital deal, the court has vitiated the agreements (including a secret MOU and a side letter) signed with Vitals, later ceded to Steward Healthcare.  More attention has been placed on the mysterious MOU issued to Vitals. The government had resisted publishing the MoU when asked by the media.  It was an investigative report by National Audit Office which persistently questioned why this MOU authorised and by whom.

When questioned by the NAO, Galea said that ME was not aware of this MOU agreement and was therefore not a party to it, and neither possessed an original or copy, nor had access to it. A curious twist of the NAO investigation shows how the privatised hospitals ability to attract multiple medical tourism underpinned the feasibility of the project.

When the Vitals contract was tabled in parliament in October 2016, it had around a fifth of it redacted. Then the question persists - who negotiated the MOU with Vitals?

In a sworn statement published on Facebook, Keith Schembri said that he did not negotiate the MoU, did not sign it, did not write it and had no involvement in it. He pointed out that the person responsible on the part of Malta Enterprise was Mario Galea and that he does not know who else was involved. The plot thickens.

When interviewed by Malta Today in July 2020, Mario Galea categorically and strongly denied he was involved in any negotiations prior to the signing of the MOU and/or negotiated the MOU itself except for his involvement in regard to the building of Barts hospital. With this rebuttal, it remains unclear who actually negotiated the MoU on behalf of the government.

I am writing about Malta Enterprise because we, as PKF, have also head dealings with them. In March 2016, PKF had requested solidarity from ME for a business promotional trip to New York and Boston. Meetings were scheduled at the Massachusetts Institute of Technology. PKF set up a meeting with Mario Galea to explore ways how this idea could succeed. Indisputably, PKF’s trip to New York and Boston was well timed, on the cusp of attracting more investment - by introducing CIC, an international business accelerator/incubator to settle and be active in Malta.

The purpose of meeting with Mario Galea was primarily to introduce our client and secure support for the US trip. With hindsight, the reception was not so encouraging even though at that time, ME financed a representative US office headed by Joseph Gauci.

There was a caveat by ME to support PKFMALTA. It issued a letter to be presented by its representative at the MIT meeting, saying that PKF was an independent organisation and not associated with ME.

The time is now ripe to reveal the treatment PKF suffered under ME’s hegemony.  As can be expected, before approaching MIT, Joseph Gauci and the PKF team had an informal meeting in Boston discussing the merits of such testimonial.

PKF needed no introduction from ME as it had a priori secured the MIT meeting on its own steam so after discussion and as a gentlemanly measure, Gauci accepted not to table the letter at the meeting. The primary objective was for the team to meet  the international business director at MIT and discuss future collaboration.  MIT does not need any introduction.

Needless to say, that with its supportive campus environment MIT houses an incredible range of student groups and acts as a catalyst with its diversity and intensely creative atmosphere, ergo innovation flourishes in all its endeavours.

Later on, a fact finding visit to Rotterdam was organized by PKF inviting the Silvio Schembri (minister for the economy) to visit a new CIC branch in Europe. The ultimate objective was for the government to assist CIC open a business accelerator branch (possibly at MCAST) and start to share its international connections.

Alas, the seed fell on fallow ground and to date no flowers have blossomed.

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