Government mum on elderly home billed as record €274 million direct order

A €58 million catering contract turned into a lucrative €274 million 500-bed residence: the government refuses to talk about it

The proposed extension at St Vincent de Paul
The proposed extension at St Vincent de Paul

Updated at 2.06pm with link to Finance Minister's reaction

The government yesterday was silent at news that it was approving an unprecedented €274 million “direct order” to catering giant James Caterers and a DB Group company to build a 500-bed extension of the state elderly home St Vincent de Paul.

The extension is yet to be built but excavation works have started, with former PN minister George Pullicino as architect for the winning consortium, and former PN deputy leader Mario de Marco acting as their lawyer in a recent public contracts review tribunal hearing on the case. 

The ministry for the family was said to have repeatedly refused to reply to questions from the Sunday Times and even turned down a freedom of information request.

The newspaper said a call for tenders for a private-public partnership was issued in November 2015 for the provision of comprehensive services to the St Vincent de Paul residence “valued at €58 million” although the details in the CT2009/2015 tender document bill it at €16 million. The bid consisted of two main parts: the provision of three meals daily to the 1,100 residents and 1,090 care professionals for a 10-year period; the second was the construction of a new kitchen facility.

However, the tender document included a lucrative add-on which gives preferences to tenderers that can provide “additional investment” – essentially, investors who can provide a ‘gift’ to the government for winning this particular tender.

No reference was made as to what is expected from the bidders. The clause stated that “such additional offer shall be of a type and nature compatible with the requirements of St Vincent de Paul”.

The more clear reference to the project is that the unspecified “additional investment will become the property of the government at no extra cost” after the contract expires after 10 years.

The newspaper quoted sources saying the government was now on the cusp of turning the catering contract into a €274 million “direct order” to the James-DB consortium since the companies will now construct a 500-bed extension for the home.

READ ALSO: Finance Minister asks for report on claims of massive direct order for elderly home

That would make the original tender unorthodox since the company was favoured through the ‘gift’ of the residence construction that was awarded the bulk of the weighting in the final evaluation.

The other bidder, the Vassallo Group’s CCE joint venture, submitted a cheaper offer for catering and the new kitchen.

The newspaper also said the James-DB ‘gift’ was costed at €30 million only, half the value of the original catering contract.

The ministry was said to have repeatedly refused to show the PPP contract, turned down a Freedom of Information request, as well as refused to answer questions on the PPP.

It also emerges that former PN environment minister George Pullicino is acting on behalf of the winning consortium as architect, having submitted a planning application. The newspaper said that although no permit had been issued, the PA had green-lighted preparatory works.

READ MORE: Catering for state hospitals a €25 million industry for one

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