NAO report slams Konrad Mizzi’s failure to cooperate during hospitals concession audit

The National Audit Office voiced it concern at Konrad Mizzi’s failure in responding to requests made by it to obtain his views on the hospitals concession.

“It is with the gravest concern that the NAO views the failure of the Minister for Tourism to cooperate in this audit as inexcusable, compounded no less by the centrality of his role in the concession,” the NAO said in its third report on the deal.

Damning details of the hospitals deal were published in the third National Audit Office report tabled in the House on Monday. It covers the transfer of the hospitals concession to Steward Healthcare in 2018 and the American company’s subsequent management of the contract. The first report was published in July 2020 and the second in December 2021.

The report states that Mizzi’s “shirking of accountability” hampered its work in understanding the initial developments of the concession.

“The NAO holds a bleak view of the Minister for Tourism’s conduct in this respect, for ministers of Government and public officials who have acted in the interests of the Government should find no difficulty in accounting for their decisions and actions,” the report reads.

The report also criticised former OPM Chief of Staff Keith Schembri over the “terse” reply it gave to the NAO, providing no insight into the mindset of Government when advocating for the Steward Health Care (SHC) to conclude with such haste.

“This Office considered the actions of the Minister for Tourism and the Chief of Staff OPM as devoid of the expected standards of accountability and transparency that ought to guide Government officials,” it said.

A tale of conflicting perspectives

Addressing the initial interactions between government and SHC, the NAO said it established the first interaction occurred in September 2017.

Keith Schembri had said it was SHC who initiated contact with the Government with the intention of taking control of the concession. This was confirmed by Chris Fearne.

“According to the Minister for Health, it was during this meeting that the SHC referred to its ongoing discussions with the VGH and enquired whether the Government would be willing to endorse a change in control,” it said. “The Minister for Health’s understanding was that it was not the Government that had initiated contact with the SHC, but it was the CEO SHC International who was the link between the VGH and the SHC, and who would also be the link between the SHC and the Government.”

A different account was provided by Joseph Muscat, who indicated that the VGH had informed the Government that the SHC was interested in the concession and referred to a meeting held between the VGH and the OPM Chief of Staff, during which the latter was informed that discussions between the VGH and the SHC were at an advanced stage.

Another contrasting perspective was provided to the NAO by Ram Tumuluri, who negated that it was the VGH that approached the government or the SHC to transfer the concession.

The conflicting perspectives rendered it impossible for NAO to establish with certainty the precise nature of the crucial initial interactions between the Government and the SHC, particularly in terms of whether it was the Government that approached the SHC (as attested by the SHC), the SHC that approached the Government (the perspective put forward by the Chief of Staff OPM, the Minister for Health and the VGH) or the VGH that approached the SHC or Government (the Prime Minister’s understanding).