Government could have terminated hospitals’ deal

Two members of the board tasked with evaluating the bids submitted for three of Malta’s public hospitals told the Court on Wednesday that if Vitals Global Healthcare (VGH)  had not maintained its agreement then penalties could have been issued and the agreement could have been terminated.

The members, auditor and accountant Robert Borg, and Manuel Castagna, partner at Nexia BT, were testifying in the case regarding the concession for the public hospitals, St.Luke’s, Gozo General Hospital and Karin Grech, awarded to VGH. The case was filed by Opposition Leader Adrian Delia who is arguing the hospitals should be returned back to the public.

Castagna is among the names listed in the court order issued on Monday freezing the assets of Keith Schembri and his family, Brian Tonna and his family as well as senior employees in their associated companies.

The opportunity for the government to terminate the hospitals’ deal changed in August 2019 when disgraced former minister Konrad Mizzi signed an agreement with the company that took over the concession – Steward Healthcare – providing them with an “escape clause” payout of €100 million, even if ordered out due to its failures.

Steward Healthcare had taken over the concession from VGH for €1. While taxpayers lost over €50 million, the once-secret owners of VGH were paid millions, The Shift had revealed.

On Wednesday, Borg also told the Court that had he known the Memorandum of Understanding (MOU) had been signed prior to the bidding process, he would not have agreed to sit on the board to select the bidder, expressing frustration that “there were two other bids which did not comply”.

Borg added that the evaluation board only had the Request for Proposals (RfP) to consider.

He also said the millions of euros which had to be released by the consortium that won the bid were not paid, and no work had been done at St Luke’s Hospital.

Borg also revealed that the deal revolved around the success of the medical school, and should the school be unsuccessful, everything else would fail.

Castagna said the government had the right to put a halt to everything. He added that he had no say in awarding the agreement, at that point. Castagna argued that although “things have changed since then”, at that time the bidder seemed credible.

The infamous MOU was once again cast into the spotlight in the courtroom when lawyer Edward Debono said it remains in limbo, and that confusion remains as to how to go about obtaining the document.


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