I challenge Abela to publish the secret Vitals-Steward agreements

I challenge Prime Minister Abela to publish this secret agreement and the legal advice he received… if he has nothing to hide, he should publish all the documentation relating to this sordid affair

G. K. Chesterton said that sometimes one needs to see the world upside down to make real sense of it and I must say that I was really tempted to stand on my head in parliament last Thursday to fathom Labour’s arguments.

We met in Parliament on Thursday to discuss the Opposition’s motion calling for the annulment of the infamous hospitals concession deal. Our reasons, our motivation for calling for the revocation of this deal are rooted in undeniable facts.

It is a fact that the deal is costing us, the taxpayers, hundreds of millions of euros for which we are getting nothing in return. According to their tender submission, Vitals and their successors Steward Healthcare should have by now delivered a functioning state-of-the-art St Luke’s hospital and a new general hospital in Gozo. They haven’t delivered on their obligations despite receiving over €250 million of our tax money. MAM, MUMN and UHM have publicly stating that Vitals and Steward failed to deliver on all of their obligations and are government to cut its losses and walk away from the deal. Incidentally, MUMN and MAM also stated that if Steward were to pack up and leave we would be none the wiser because their contribution to the running of the hospitals is minimal.

How did Labour counteract this argument? Minister Fearne and Minister Scicluna argued that even if the concession agreement is rescinded, Malta would still need to fork out the money to pay for health services. This is warped and irrelevant reasoning. The issue is not how much it would cost us or another contractor for that matter to deliver the service but whether Vitals and Steward delivered on their obligations. They did not. If this was any other public contract, government would have invoked the contract clauses on non-delivery. Government would have withdrawn the performance guarantee bond, put the contractor on notice and subsequently moved to terminate the contract.

Instead of taking these steps to protect the national interest, government inexplicably moved in the other direction by removing the performance guarantee clause, introducing a new clause protecting Steward in the event of early termination and year after year paid the contractor more than was due according to the terms of the contract. In other words, Government rewarded Vitals and Steward for their inefficiencies and their non-delivery.

We called for the termination of the concession agreement because of the irregular manner in which it was conceived, awarded and executed. Government signed a secret memorandum of understanding with Vitals six months before issuing the call for expressions of interest. This goes against the spirit and letter of public procurement procedures which are there to ensure fairness, transparency and open competitiveness.

Government pre-selected Vitals and awarded them a €2.1 billion health service contract even though they had zero experience and zero funding. No due diligence was done on Vitals or on its ultimate beneficial owner who remains unknown. When Vitals decided to call it a day, government allowed them, against normal public procurement regulations, to pass on their obligations to a third party: Steward.

To rub salt in a festering wound, Vitals did so at a profit. Yes, they profited on our backs after stealing our money. Government speakers in parliament avoided at all costs to speak on this point. It was as if Vitals were never part of the deal. Which makes you wonder: who is Prime Minister Robert Abela defending?

Who was Robert Abela defending last August when government signed the early termination clause that guaranteed €100 million payment to Steward if the contract is rescinded? On this point, Robert Abela made desperate argumentative acrobatics that can best be described as shocking, puerile and nonsensical. He said that by putting forward the motion we are defending Steward’s interests. According to him, the Opposition is responsible for this clause because we raised the matter in parliament. We are guilty according to Robert Abela because we are carrying out our duty to protect the interest of the people, something his government has failed to do when it accepted the clause and signed it last August.

Robert Abela confirmed that this agreement was signed when he stated in Parliament that he is seeking legal advice on the interpretation of the clause in question. The fact that he felt the need to seek legal advice is in itself a matter of concern because it proves that the clause, as written, is open to different interpretations. Why wasn’t legal advice sought before the clause was signed way back in August? Cabinet was fully aware last August that the contract was being investigated by the Auditor General and the Courts.

These investigations could potentially lead to the termination of the contract. With these investigations under way, why did Cabinet introduce an insurance clause that guarantees a payment of €100 million to Steward if the contract is rescinded? This question was not answered in Parliament last Thursday.

I challenge Prime Minister Abela to publish this secret agreement and the legal advice he received. In fact, while he is at it and if he has nothing to hide, he should publish all the documentation relating to this sordid affair.

More in Blogs