News • 1 June 2003

Minister’s ‘wait-and-see’ on incinerator replacement

US supplier’s operations closed down, but government cannot intervene until tendering deadline expires

Matthew Vella

Health Minister Louis Deguara and Director-General Dr Ray Busuttil have confirmed with MaltaToday that the public will have to wait until October 2003 to see whether St Luke’s hospital incinerator will be replaced with microwave technology.

MaltaToday’s investigations have revealed that the US supplier Sanitec, represented in Malta by tender winners Sarrebico Medical Supplies Ltd, are not in a position to supply the microwave technology. This newspaper can confirm Sanitec has stopped its operations in the US and owners Terry Quatkemeyer and Stephen Ventre have been arrested for fraud.

Minister Deguara however was not impressed by MaltaToday’s evidence. Asked about the ministry’s contingency plans during a health department press conference, Dr Deguara said: "You believe many things that get published," he said, "this is just what you are saying."

Waiting, waiting…

Once again, early indicators of a postponed deadline. If US suppliers Sanitec fails to provide the technology for the microwave replacement for the hospital incinerator, the public may have yet to continue to suffer St Luke’s hospital’s smoking chimneys.

Dr Ray Busuttil said the government can’t do anything until the tendering time expires, at which point the microwave technology will have to be delivered:

"We cannot investigate any other alternatives at this point. The offers were submitted, evaluated and a tender awarded. The winning company accepted the conditions in the letter of acceptance through a deposit of Lm50,000. We cannot change the letter of acceptance until the term ends.

"If the company fails to deliver, we shall see why this was and see whether we should issue another tender, or award it to the second cheapest bid, or carry on with the initial offer at the expense of the company awarded the tender. These are the procedures that have to be followed."

Dr Louis Deguara is confident Sarrebico’s suppliers Sanitec will deliver:

"The tenderer has already paid a Lm50,000 bid bond. There will be a fine if the apparatus is not be delivered, which puts in doubt your categorical statements. As far as I am informed the tenderer has accepted this letter of acceptance.

"It is not the health department’s responsibility to see whether the supplier can or cannot supply the apparatus, when the tenderer has bound itself with a Lm50,000 guarantee. And the tenderer will deliver in time.

"Do you think someone in their right senses would make a Lm50,000 deposit without being certain that they can deliver their product on time?"

Why Sanitec can’t deliver

MaltaToday contacted US journalist James McNair to ask him about Sanitec’s ability to supply and support its equipment. McNair said: "It doesn't appear that anyone connected with any permutation of Sanitec is in a position to deliver and support a machine outside of the US. Even if they were, there's still the question of technology ownership and market rights that is being disputed in court."

Asked whether Sanitec was still operating, McNair said: "All I know about the legit Sanitec is that it shut down its New Jersey Headquarters and sold its Kentucky plant sometime last year. The Kentucky plant has since been shut down as well."

Sanitec became involved in fraud scandals through its owners Terry Quatkemeyer and Stephen Ventre and revelations started appearing in the media in February 2002.

Quatkemeyer was sentenced to prison for defrauding three LA banks of $1 million in loans for two and half years, and is today inmate 88299012 at Fort Worth prison, Texas.

Ventre has been unable to conduct business since July 2000 due to a ‘cease and desist’ order and is now facing five years in jail after pleading guilty to fraud.

A final decision on the awarding of the incinerator replacement tender was taken by contracts department on 24 December 2002. Minister Deguara and Dr Busuttil have confirmed no payments have been made to Sanitec yet.

The attitude of Sarrebico remains mysterious. While it has paid a Lm50,000 deposit, and claims that it will supply the equipment, it does not reply to any questions put to it by MaltaToday. Indication, if any more was necessary, that not all is well with its plans.

In a possible strange twist, the MEPA could still spoil the day for Sarrebico since the health department's planning application to replace the incinerator still has to face an Environment Impact Statement, which means, theoretically, that the plans to use Sanitec equipment could be rejected in the planning process.

What the public has to know

The public remains uncertain as to whether the health ministry and the contracts department were aware of Sanitec’s ability to deliver and support the microwave technology or otherwise, in time for the October 2003 deadline.

Some simple research would have shown the US supplier’s fate had already been called into serious doubt by February 2002, exactly 10 months before the tender was awarded to Sanitec’s local representatives Sarrebico.

By law, the process is now irreversible until the delivery date in October.

Minister Deguara and Dr Busuttil said the reports that evaluated all the tenders presented to the contracts department by health experts would not be published, since "it was not the practice of the adjudicating board."

They both confirmed that amidst the reports conducted by Dr Michael Borg and Dr Lucienne Licari on the tender companies’ bids, an expert was chosen by the department to conduct an independent evaluation:

"We met with the adjudicating board, Dr Borg, Dr Licari and the contracts department, thrashed out all differences, and arrived at a common conclusion which everyone agreed to. Reasons were given as to why a tender was accepted and others were not. An appeal was lodged, and the contracts department’s initial decision was re-confirmed."

Asked who the independent expert chosen to evaluate the tendered bids was, Dr Deguara said the exchange with MaltaToday "had gone beyond the limit."

"You seem to know everything already," Dr Busuttil said, "All positions were exhibited in the appeal according to law and a decision was taken. I have nothing else to add."

The Health Minister finished off the press conference asking whether any of the rival bidders were being asked why they had not taken recourse through the traditional channels provided for them by law:

"There are legal avenues available for those failing to win tenders to appeal the decision taken, in Court, which also puts the whole tendering process on hold. In this case too there’s an appeal in Court that will prevent us from opening the Mater Dei hospital in June despite our commitments, and this is in line with what is stipulated and permitted by law, and there’s nothing to do right now.

"Instead it seems that these people are asking journalists to take up their dirty work."