PL, PN remain non-committal on termination of €274 million ‘illegal’ contract

Updated to include the PN statement issued immediately following the publication of this article. 

The two major political parties represented in parliament are refusing to commit to a stand to rescind the €274 million “illegal” deal involving St Vincent de Paul residence for the elderly following a damning report by the Auditor General.

So far, Prime Minister Robert Abela has only defended the deal which the National Audit Office (NAO) investigated and concluded was in breach of the law.

Asked to state whether they agree that the 15-year contract costing taxpayers more than €18 million a year is going to be cancelled, both Parties addressed the NAO conclusions superficially, avoiding a reply to the big question on whether they are willing to take any concrete steps to cancel the “illegal” contract with Silvio Debono’s DB Group and James Barbara’s James Caterers.

This can be done through a legal challenge in court, similar to steps taken by the government in the case of the Gaffarena scandal related to the Old Mint Street property deal in Valletta, and by the Opposition in the case of the VGH deal privatising three public hospitals.

Maybe yes, maybe no

While Labour’s spokesman completely ignored The Shift’s questions, even though these were also sent directly to Prime Minister Robert Abela, the Nationalist Party tried to circumvent the issue and instead focused only on the political ramifications of the NAO report.

The PN’s spokesman referred The Shift to a short press release issued on the subject, in which it was stated that Labour politicians responsible for this contract should carry political responsibility.

While failing to address the question on whether the Party believed the contract should be cancelled, the spokesman did not reply to questions on whether the partners of the €274 million consortium – DB Group and James Caterers – are financial donors to the PN.

In 2017, then Opposition Leader Simon Busuttil had faced flak from one of his deputy leaders, Mario de Marco, for taking a stand against DB Group’s controversial development at St George’s Bay on public land given to Silvio Debono for a pittance. De Marco had said he had a right to defend his client’s interests.

The same questions were put to the Labour Party, which followed its standard procedure of ignoring questions from the press.

Instead, through the Active Aging Ministry, the government issued a statement insisting that “it respects the NAO report” and announced that it will be “studying” the conclusions so that “mistakes” won’t be repeated in the future.

The ministry also tried to justify the illegalities by stating that the project resulted in another 500 beds for the elderly.

While condemning the fact that no Cabinet authorisation was sought prior to the deal being sealed, the prime minister stopped short of announcing any action to be taken to correct the massive irregularity paid by taxpayers, outlined in the NAO report.

The Shift is reliably informed that both DB Group and James Caterers ‘support’ both major political parties and various PL and PN MPs, both financially or in kind.

A €57m tender morphs into a €274m deal

The €274 million contract awarded in 2017 was revealed by the media in 2018, a few months after it was concluded.

A tender involving a €57 million contract for the provision of meals and the building of a kitchen for a 10-year period at St Vincent de Paul morphed into a €274 million deal.

The consortium, led by Silvio Debono and James Barbara, negotiated with the government beyond the parameters of the tender to build a €29 million extension, offering 504 additional beds “at no cost to the government” on condition that their management was to be assigned to the same consortium for a 15-year period.

The NAO concluded that public procurement rules were breached when the government struck this deal with the consortium.

While both the minister directly responsible for this deal, Michael Falzon, and then parliamentary secretary Anthony Agius Decelis are now distancing themselves from the deal, both had defended the contract in 2018 and accused the media of fabricating stories.

Social Solidarity Minister Falzon, still in office, had told parliament that the story was “an invention”. At the same time, he refused to publish the contract even when a Freedom of Information request was filed, citing “commercial confidentiality”.

Agius Decelis, directly responsible for St Vincent De Paul when the deal was negotiated, went a step further and accused the media of lying. He had denied a direct order was issued and insisted that all public procurement rules had been observed.

The Finance Minister at the time, now Central Bank Governor, Edward Scicluna, had declared no knowledge of the direct order, saying he had learned of this massive outlay of public funds through the media.

Immediately following the publication of this article, the PN issued a statement in which it stressed the need for Prime Minister Robert Abela to ensure accountability, saying again that “political responsibility must be carried”.