Government accepts Godfrey Farrugia’s call for Auditor General to probe elderly home contract

Government has welcomed a call by Democratic Party MP Godfrey Farrugia to have a multi-million-euro project at St Vincent de Paul scrutinised by the Auditor General.

The project, a 500-bed extension to the State home for the elderly, has been mired in controversy after it was listed as a direct order in the Government Gazette.

Farrugia had called on Parliament’s Public Accounts Committee to refer the €274 million project, awarded to James Caterers and a subsidiary of the db Group, to the Auditor General for investigation.

In a statement on Friday afternoon, the parliamentary secretariat for the elderly said it had “absolutely no difficulty” for the project to be examined by the National Audit Office.

“As has already been said many times, no direct order was awarded. The contract was awarded after a competitive tendering process,” the secretariat said.

The unconventional tender was for the provision of catering services and the construction of a kitchen at St Vincent de Paul but bidders also had to propose an additional investment.

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The winning bidder proposed an extension to the home but the original bid ballooned to a €274 million contract after negotiations between the consortium and St Vincent de Paul.

The secretariat said the discussions meant that instead of two blocks of 252 beds and an annual expenditure of €1.5 million for 10 years, the final agreement covers four blocks of 504 beds, which will become government property and will be delivered after just three years.

“The negotiations led to the conclusion of a management service agreement that sees St Vincent de Paul forking out an expenditure that is 6% less per bed over what it pays now,” the secretariat said.

It was the management services agreement that jacked up the price of the original bid but government has insisted all along it will be saving money over the duration of the concession.

The secretariat said the whole bidding process and negotiations were conducted under the auspices of the Contracts Department. The company that lost the bid twice appealed the outcome but lost.