The government is paying the Downtown Hotel in Gozo more than €100 daily per room to house geriatric patients relocated there from the island’s hospital, in a contract signed without going to tender.
The contract runs for a year, sources said, meaning the hotel stands to bring in €1.6 million.
A spokesperson for Gozo Minister Clint Camilleri, who strenuously defended the deal, did not dispute the duration of the contract when asked.
Joseph Portelli, the Gozitan property supremo who owns J Portelli Projects, is a director of the hotel and has a small shareholding.
Most of the elderly female patients, numbering 81, moved to the hotel over the past few days after the rooms were modified to hold two patients each, including the installation of hospital beds and electric wiring.
The move to the hotel was undertaken to enable Steward Health Care, which runs the hospital, to “re-purpose” the entire geriatric wing with its 81 beds “for COVID-19 care.”
In the wing at St Anne’s Residence, the residents were spread in a mixture of rooms, ranging from single-person rooms to wards with four beds.
According to Steward, St Anne’s functioned not so much as a “standard care or nursing home but more as a geriatric hospital. Patients have higher dependency and more co-morbidities than expected in a standard nursing home”.
Sources familiar with the move have questioned whether Downtown can now meet these standards, with its relatively cramped interior and two patients housed in every room.
Enjoying a measure of isolation
The Gozo minister’s spokesperson outlined nine reasons why this particular hotel was chosen. These range from its central location and proximity to the hospital to being a “fully licensed accommodation” and “having no adjacent building, thus enjoying a measure of isolation”.
“The negotiated procedure,” the spokesperson said, “is no different than [other] similar procedures during these times of emergency when delays cannot be afforded, including for the provision of accommodation for similar purposes and medical staff on the frontline of the battle against COVID-19.”
She said Downtown would be paid €54.79 daily for every bed but did not deny or confirm that the contract is for a year.
For a one-year booking, the hotel will rake in over €1.6 million.
The price negotiated – €109.58 per room – is higher than the room rates that hotel guests at Downtown were paying, which according to Tripadvisor ranged from €48 to €87 per room.
The spokesperson said the payment includes “any alterations required, cleaning services, reception services and general maintenance services” as well as takeover of wider facilities – the restaurant and café, the foyer, lifts, toilets, areas for kitchen and food assembly, waste and chapel, and access to the underground garage.
She described the contracted price as fair, reasonable, and competitive, especially when one “factors in the loss of goodwill and reputation which the hotel has been building for the past years”.
Under a previous PN administration, a substantial part of one of the floors of Downtown had been rented out to serve as premises for the Public Registry for several years. Downtown Ltd has two shareholders: a company that sells cars and ancillary services called SB Autocentre Ltd and Portelli.
Portelli’s involvement has generated much chatter in Gozo and on social media. Contacted for comment, a spokesperson for Portelli denied that he owns the hotel.
“He is only a 4% shareholder and consequently has no controlling interest”.
Registration company records show that Portelli, together with Raymond Galea of SB Autocentre, is a director as well as legal and judicial representative.
Financial industry sources say that these roles suggest an involvement and arrangement deeper than a mere 4% shareholding.
Steward said that the elderly patients will eventually be returned to the Gozo General Hospital. “Once these (COVID-19) beds are no longer needed, the nature of alterations made is reversible, such that the facility can be quickly turned-around to enable RSA [St Anne’s Residence] to again accommodate our elderly residents.”
Was there an alternative to Downtown?
The Gozo ministry said the “negotiated procedure” with Downtown was activated after “substantial market research carried out in Gozo” in circumstances that “necessitated a swift and calculated response”.
One option, though, was to negotiate with a range of hotels simultaneously and then make a direct choice on the basis of cost and standards of care possible.
Although Downtown has the advantage of being located in Rabat – as is the hospital – another handful of hotels whose price range is similar are less than 10 minutes’ drive away.
One of them, for example is situated in a quiet area with 48 rooms of different sizes – which would allow patients with particular conditions to be housed singly as in the hospital – set on two or three floors.
All rooms have airy terraces and the hotel has a spacious restaurant. Unlike Downtown, it has expansive internal grounds with lots of greenery where residents would be able to get some fresh air while remaining within the grounds.