Health ministry risking diplomatic row over mismanaged Paola Hub

The government is risking a diplomatic rift with Italy due to its mismanagement of the regional health centre, better known as the Paola Hub, funded by the EU and involving a subsidiary of an Italian State entity.

Following Health Minister Jo Etienne Abela’s decision to issue a Termination Notice to Ergon Projects Ltd, the main building contractor of the severely delayed €40 million project, the Italian government is raising objections to the Minister’s heavy-handedness and mismanagement, according to diplomatic sources.

Ergon Projects Ltd, which was handed the project in 2018, together with the beleaguered Technoline, is a subsidiary of Fincantieri, a company owned by the Italian government.

According to diplomatic sources, the Italian government has already protested informally about the government’s treatment of its subsidiary, and it is not excluding further action.

While true that Ergon did not deliver on time, the company is arguing that this was due to factors outside its control, including Technoline’s involvement in alleged corruption, now in court, and the government, notably the Foundation for Medical Services (FMS) failing to deliver on several aspects of the project.

The FMS was at the time under the management of Carmen Ciantar –  former health minister Chris Fearne’s campaign manager.

Ergon may open legal proceedings against the government, which would result in further delays for the project.

Senior health sources told The Shift that the Paola Hub’s construction was almost complete and could be handed over to the government in a matter of days. However, no medical equipment has been installed, as Technoline, entrusted by the government to supply the equipment through a different tender, has failed to deliver.

Pictures of the project in the media show the building is finished but void of medical equipment.

The sources suspect that the government’s decision to issue a termination letter may be associated with delaying tactics used by the project managers, acting on behalf of the Health Ministry, to give Technoline more time.

Technoline is, on paper, owned by Ivan Vassallo, who was just an employee when the company was bought. The Shift revealed in 2019 that the company was bought using public funds.

The magisterial inquiry confirmed that Technoline was bought with public funds in a complex arrangement involving former Times of Malta boss Adrian Hillman and contractor Pierre Sladden, acting on behalf of disgraced former OPM Chief Keith Schembri and former minister Konrad Mizzi.

Following court arraignments on charges of corruption, money laundering, and other accusations, Vassallo and Technoline are now facing freezing orders on assets, making it very difficult to deliver on the raft of tenders handed to them by the government.

Last May, a few days before the MEP and local council elections, Prime Minister Robert Abela visited the Paola Hub in a publicity stunt announcing that it was ready and opening its doors within a few weeks. This has not happened.