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Government Dished Out €1.3 Million To Vitals In ‘Irregular And Unwarranted’ Payment

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Malta’s government dished out an “irregular and unwarranted” payment of €1.3 million to Vitals Global Healthcare, the former controversial concessionaire of three state hospitals, the National Audit Office has declared. 

According to the NAO, the Government backtracked on the obligation imposed on the VGH to incur costs like cleaning, security and support. The total payment was €1,305,688.

Disgraced former minister Konrad Mizzi, who was responsible for the project from its inception until his eventual resignation, was the one to sign off the favourable terms to VGH – only seeking Cabinet authorisation once the deal was already signed. 

Meanwhile, dates of contractual milestones, which VGH missed regularly, were also changed without the approval of Cabinet. 

VGH had first been granted a controversial concession for the Gozo General Hospital, St Luke’s Hospital and Karin Grech Rehabilitation Hospital. 

It has been revealed that the government signed a Memorandum of Understanding months before a request for proposals was even announced. It has been mired in corruption claims and is currently subject to a magisterial inquiry. 

The company was forced to sell off their operations to Steward Health Care just 21 months after starting amid growing financial debt, which stood at €36 million by the end of 2017. Its CEO, Ram Tumuluri, reportedly still made off with a €5 million bonus.

An un-redacted contract revealed that taxpayers were paying VGH around €188,000 a day (€70 million a year) to provide hospital beds to the state, €1.2 million a year for the Barts medical school and a further €1 million for a helicopter service.

Steward Healthcare was brought in to replace them, with VGH unable to pay its employees. They were given certain assurances by the government, namely from Mizzi and former Prime Minister Joseph Muscat, when they were brought in to save the failing concession.

This included a massive €100 million buyout should the concession be rescinded and a secret €8 million bank guarantee (which has since been waived).

It was recently revealed that Muscat was paid €60,000 from Accutor AG and Spring X Media, two Swiss companies owned by Pakistani lawyer Wasay Bhatti, in the early months of 2020, shortly after his resignation as Prime Minister.

Accutor AG had received €3.6 million from Steward Healthcare during the company’s takeover of the hospital contract from Vitals Global Healthcare.

The deal has created massive gaps in operations – with Steward staff being paid less than their state counterparts for doing the exact same job. Meanwhile, the government continues to fork out millions for a service that is not too dissimilar from Malta’s.

What do you think of the detail?

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Julian is the Editor at Lovin Malta with a particular interest in politics, the environment, social issues, and human interest stories.

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