Concerns by the National Audit Office over the government’s concession of three state hospitals to Vitals Global Healthcare have been substantiated following an analysis of a memorandum of understanding that had inexplicably gone missing.
“Having reviewed this MoU, the NAO affirms that all findings and conclusions reached in its initial report remain unchanged, with concerns highlighted therein substantiated by the facts brought to the fore,” the NAO said in a report today.
Earlier this month, the NAO warned there was evidence of collusion between the government and VGH’s investors, rendering the entire concession process dubious.
It also warned that the government’s due diligence on VGH before awarding it a concession in 2015 was “grossly inadequate” and that the investors’ proof of finance for the project was issued several days before the government published its request for proposals.
The NAO also said an important memorandum of understanding paving the way for the concession of the Maltese public hospitals couldn’t be found. However, it was indeed found shortly after Prime Minister Robert Abela gave a 24-hour ultimatum for it to be found.
In its new report, the NAO confirmed that this MOU was signed on 10th October 2014 by then Economy Minister Chris Cardona on behalf of the government and by Mark Edward Pawley, Askok Rattehalli, Mohammed Shoaib Walajahi and Chaudhry Shaukat Ali on behalf of the VGH investors.
“Acknowledged in the MoU was that the investors were interested in investing in the setting up of a Gozo Medical Complex, which comprised the extension and operation of the Gozo General Hospital, the construction and operation of an assisted living centre, as well as the construction of a medical school to be operated by Barts School of Medicine and Dentistry,” it said.
“Having reviewed this MoU, the NAO affirms that all findings and conclusions reached in its initial report remain unchanged, with concerns highlighted therein substantiated by the facts brought to the fore.”
“The NAO is of the opinion that the MoU entered into by the government and the Investors and the subsequently issued Request for Proposals relating to the concession of three public hospitals can be considered as one process.”
“First, there exists significant overlap between the Investors that entered into the MoU with the government and the owners of Vitals Global Healthcare Ltd that the government subsequently awarded the concession to.”
“Second, the nature of the project remained unchanged as the refurbish and operate model was retained, revenue by the government always guaranteed in the envisaged long-term agreements, medical tourism underpinned feasibility, and the construction of Barts Medical School a central requirement throughout.”
“The only major difference was the reduction in the intended number of beds at the Gozo General Hospital, which reduction was more than compensated for through the inclusion of St Luke’s Hospital and Karin Grech Rehabilitation Hospital. The overlap in terms of the nature of the project and the identity of the Investors is evident and strongly supports this Office’s understanding of a process that was staged and deceitful.”