St Vincent de Paul scandal: New deal increased cost to €327 million

The investigation by the National Audit Office did not consider the price revision in 2020 that increased costs by 20%.

 

The €274 million deal the government struck with DB Group and James Caterers is in fact costing taxpayers far more than originally thought, thanks to a revision of the agreement last year that increased the cost by another €53 million.

The investigation by the National Audit Office (NAO) that concluded the ongoing deal is “illegal” did not evaluate the increase in cost in 2020 when the construction of the four blocks at the residence for the elderly was completed, and Social Solidarity Minister Michael Falzon agreed to a 20% increase in costs for services provided.

The new arrangement means the cost of the scandalous deal went from €274 million to €327 million over 15 years.

In its report, the NAO already made it clear that the consortium led by Silvio Debono and James Barbara was charging the government far more than other competitors in the field providing the same services.

Through this revision, the consortium went further, charging the government €60,000 a day instead of the €50,000 originally agreed.

In its investigation, the NAO found that the daily rates on which the original costings were based were flawed and based on inflated prices.

The NAO report states that after reaching a deal in which the consortium was to be given the management of the project for 15 years by direct order, the CEO of St Vincent de Paul Josianne Cutajar, who is a protagonist in this scandal, commissioned an unnamed audit firm to assess the running cost for each bed at the facility at the time.

According to the audit, based on information supplied by St Vincent de Paul, each bed was costing taxpayers €105.50 per night in 2016.

To make the direct order look ‘acceptable,’ the consortium then agreed to charge the government a ‘discounted’ rate of €99.17 per bed per night.

However, the NAO found that the original audit was based on wrong information.

“The rates established (by the audit firm in 2016) were inherently laden with inefficiencies, resultantly false and overstated,” the NAO concluded.

To add insult to injury, just before the new blocks were completed, the prices the consortium were to be paid were revised upwards by another 20% per cent last year.

While the government’s illegal deal is being defended as some achievement in obtaining value for money, this is far from reality.

The NAO findings make it clear that taxpayers are paying much more than they should, with James Caterers and DB group pocketing the highest rates on the island, even when compared to similar private facilities. This did not consider the revision in 2020 for a 20% increase in costs.

In reality, taxpayers are being charged an extra €25,000 a day by the consortium, amounting to €9 million a year.

The owners of the two companies involved, James Barbara of James Caterers and Silvio Debono of DB Group, are well known in political circles for their ‘support’ of the two main political parties and their candidates.

These contributions include direct financial ‘donations’ to the parties and ‘sponsorships’ for social gatherings and catering facilities, particularly during electoral campaigns.

Political candidates host their regular coffee mornings and other activities at venues owned by Silvio Debono, while catering is often ‘procured’ from James Caterers.

In return, both companies have profited from government deals over the years, including the acquisition of public land for hotel extensions and multi-million euro tourism projects, such as the controversial ITS deal, and the building of new catering facilities, including factories.

Despite the findings related to the St Vincent de Paul scandal, neither of the two political parties have made a clear call to end the contract. The Opposition has called for the government to carry political responsibility while the government said it would look into “mistakes”.

                           
                               
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GeeMike
GeeMike
1 month ago

Well if you buy a Lamborghini Urus, the costs go up. It’s all about style. Did NAO take this into consideration!

James Micallef
James Micallef
1 month ago

Stealing E300 from every single person on the island. I wonder what a struggling working class family of 4 would make of ‘thrir’ Labour government stealing E1200 from them. Added up to Electrogas, Montenegro, ITS, all the other scandals… plus the hundreds (or thousands?) of positions of trust, consultancies, board memberships and expenses…
I would say there are a couple of thousand Labour cronies printing money, while the couple of hundred thousand Labour ‘rank and file’ are kept happy with a few hundred extra, or jumping a queue at a hospital while they are being robbed of thousands.
Labour will never lose an election until their own most loyal supporters realise exactly how much money they were cheated of

Noel Ciantar
Noel Ciantar
1 month ago

We can therefore say that the “free gift” to the Maltese nation amounts to a third of a Billion Euros, as opposed to a quarter of a Billion Euros as we thought before.
And the World’s Most Expensive Kitchen just got a bit more expensive. But the World’s Most Expensive (and Corrupt) Cabinet knew nothing about it.

Last edited 1 month ago by Noel Ciantar
Jools Seizure
Jools Seizure
1 month ago

Is there anybody still thinking that independence was a good idea?! At this rate, it would have been better had we stayed put under the British … and this coming from an Anglophobe.

Old man
Old man
1 month ago
Reply to  Jools Seizure

If we had voted for Mintoff’s integration proposal and become part of the UK, I assure you that the UK would today have the most corrupt government in power led by a Maltese fraudster. We are experts. I think that Britain dodged the bullet in 1958

Henry s Pace
Henry s Pace
1 month ago

It all looks like there is a collusion by the political parties and top business.
This confirms that Malta has become a Mafia State and nothing more

Leonard Schembri
Leonard Schembri
1 month ago

It suits the Opposition not to object because it believes that it can win the next election and also gives them the opportunity to do the same when in government.

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