Editorial | Vitiated hospitals deal must be rescinded

Contractual clauses that are deleterious to the public good and which were inserted last year to protect the interest of Steward rather than the taxpayer, should be legally challenged and those behind them investigated for collusion and dereliction of duty

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The National Audit Office has always been thorough in its investigations of public entities and contracts, measuring every word used in its reports.

So, when the NAO uses strong language such as “collusion”, “predetermined deal”, “a dark shadow” and others to describe a multi-million-euro concession agreement, it signals something was very wrong with the deal.

This was the outcome of the NAO investigation of the procurement process that led to the award of three public hospitals to Vitals Global Healthcare for a 30-year concession, extendable to 99 years.

The damning report published this week has, in no uncertain terms, shown that the VGH agreement was a done deal by virtue of a memorandum of understanding the government had entered into with some of the investors prior to the publication of the request for proposals.

This reinforces the perception that corruption underpinned this major government project that involved the part-privatisation of three public hospitals.

Obviously, the NAO conclusions did not come as a surprise to many.

Let us not forget that despite VGH unveiling its ambitious plans to invest millions to upgrade St Luke’s Hospital and Karin Grech Rehabilitation Hospital, and build a new Gozo hospital, the company went belly up with none of the planned projects getting off the ground.

The NAO found that no thorough due diligence was carried out on the companies that formed the VGH consortium and only a superficial feasibility study was undertaken to determine whether the project was financially sound.

And in all this malaise, the NAO laid the blame for poor governance squarely on then health minister Konrad Mizzi and the permanent secretary.

The project was captained by Projects Malta, a government entity set up after the 2013 election and placed under Mizzi’s wing.

The NAO report expressed concern at the fact that in this tender, the health authorities and the finance ministry were not included.

With all this carrying the official stamp of government, it is no wonder that what was promised never materialised while investors still made off with millions.

The VGH deal was a dirty one from inception, which merits being investigated further for possible criminal breaches.

While this leader is all for public-private partnerships, these must be crafted in a spirit of good faith and in full respect of fair competition that ensures the public derives the best value for money.

The VGH concession was anything but this – the deal lacked transparency, the tendering process was unfair and the companies involved were obscure, without a track record in healthcare.

The government has no option at this stage but to pull the plug on the deal, which was eventually transferred to American outfit Steward Health Care.

The country cannot entertain a project that has so far failed to deliver and is costing taxpayers millions with no return in sight.

This leader is not averse to a PPP in the healthcare system but this cannot be the dubious deal negotiated and concluded by Konrad Mizzi.

At a time when Malta’s international reputation is struggling because of its failure to tackle money laundering, corruption and financial crime, the government must come clean on the VGH fiasco.

Contractual clauses that are deleterious to the public good and which were inserted last year to protect the interest of Steward rather than the taxpayer, should be legally challenged and those behind them investigated for collusion and dereliction of duty.

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