Deputy prime minister Chris Fearne’s health ministry has spent €60 million in taxpayers’ money on direct orders to private companies in the first six months of 2021 alone. At least €23.5 million of that went to friends, political helpers and party donors.

The orders are distributed via the negotiated procedure (contracts) system – another form of the direct order system that eliminates competition in the distribution of government contracts.

Public procurement rules require government contracts to be put out to tender, allowing a wide range of competing bids in order to get the best value for taxpayers’ money in a transparent process that guards against cronyism. Direct orders are only permissible in extraordinary circumstances.

Private hospital beneficiaries

St James Hospital – one of the few remaining private hospital facilities, though heavily reliant on public contracts for its survival – has been awarded no less than six direct orders during the first six months of the year, with a total value of €2.7 million.

St James Hospital Group is owned by former Nationalist MP Josie Muscat, whose son Jean Claude Muscat, CEO of the group, is a personal friend of the deputy prime minister.

St James has benefitted from several multi-million direct orders over the past few years to provide raft of services concurrently provided ‘free of charge’ through the government’s national health system.

Fearne claims that outside private health providers are required to be able to keep up with heavy demand.

Other private healthcare providers, such as St Thomas Hospital – owned by former Labour MP Louis Buhagiar  – and Da Vinci Hospital, also received direct orders for similar services, though for much smaller amounts than those granted to St James. St Thomas received €630,000 while Da Vinci was awarded €500,000 in contracts.

PBS executive chairman’s private enterprise

Mark Sammut, currently running PBS after being handpicked by Robert Abela, was handed almost €1 million in direct orders related to the pandemic. Sammut’s wife Carmen, one of the owners of the former Pirella supermarkets, served as Fearne’s personal assistant up to 2019.

Sammut’s private company – Cursor Ltd – was selected by Fearne’s Ministry to provide the COVID-19 digital vaccination certification system.

Fearne, officially distanced himself from Sammut during the campaign for the Labour leadership last year, just a few weeks after insisting that his then assistant had no conflicts of interest.

Her husband, appointed PBS executive chairman in April this year, was already receiving substantial direct orders during that period. The Shift is informed that Sammut also ‘helps’ Fearne during his electoral campaigns, providing important IT services ‘free of charge’.

Ubiquitous DB Group/ James Caterers

Companies owned by businessmen and financial backers of both the PL and the PN, Silvio Debono and James Barbara, featured heavily in the list of ‘negotiated procedures’ published in the government gazette.

Through their various co-owned companies, including Health Services Group, Support Services, Healthmark and others, the two businessmen were handed a further €20 million in contracts in the first half of 2021, mostly associated with the Covid-19 ‘emergency’.

Companies belonging to the two businessmen now dominate the provision of nurses, carers, and other health-related staff to the government, ‘importing’ lower-paid human resources from developing countries and selling their services to the government via a raft of hefty contracts.

Failing institutions

The National Audit Office has issued several rebukes to the government on the illegal abuse of public procurement rules by ministries.

However, these statements have been rare. In most cases, the NAO, the Department of Contracts and the Finance Ministry have failed to take any action to rein in the rampant, illicit use of public procurement rules.

In May this year, a three-year long investigation by the NAO established that a record direct order worth €274 million awarded to Silvio Debono and James Barbara for the management of a new extension at St Vincent De Paul was illegal.

No action has yet been taken by the prime minister to rescind the contract or review the award, despite a public pledge to do so.

The PN opposition has failed to put meaningful pressure on the government to address this issue, beyond publishing the occasional press release criticising the government.

Both political parties depend on donations from friendly businessmen to survive.