Former minister Konrad Mizzi refused to meet with the National Audit Office as it investigated the failed Vitals hospitals deal despite his "pivotal role" in the debacle.

The NAO noted with "grave concern" that its efforts to meet with the ex-Labour minister were "futile" and that much of the negotiations that led to the deal remain "opaquely concealed".

Parliament’s public accounts committee requested the NAO audit the concession awarded to Vitals Global Healthcare Ltd (VGH) in relation to the Gozo General, St Luke’s and Karin Grech hospitals.

It was awarded the concession in 2015, despite no experience in the sector and crashed out less than two years later.

The 460-page review found that "none of the milestones" set for the private concessionnaire to run the three hospitals were achieved.

Negotiations between the government and the VGH were "opaquely concealed" to the NAO due to the lack of documentation kept and conflicting accounts provided by those involved. 

Mizzi's role

Mizzi was the minister responsible for health at the point when negoations with VGH began and signed all contracts on behalf of government except the Emphyteutical Deed. 

He continued to represent the government on the deal, even when he was no longer responsible for the health portfolio. 

"Aside from constituting a limitation to the audit, Hon. Mizzi’s failure to attend to the several requests made by the NAO constituted a serious failure on his part in terms of the level of accountability expected of a former minister of Government and in terms of the standard of good governance that ought to have characterised a project as material and as important to the national health services as was this," the NAO said. 

Mizzi was in parliament on Tuesday, after an illness, but did not speak to reporters before entering. 

In a report, published on Tuesday, the NAO listed multiple failures in the negotation process between the government and VGH.    

Former Minister Konrad Mizzi.

The first part of this audit, was issued in July 2020. It had found VGH should have been disqualified from bidding for the takeover of three state hospitals.

Tuesday's lengthy second instalment of the probe deals with the negotiations leading to entry into the concession contracts, a review of this contractual framework and its implementation until the transfer to Steward Health Care - the US company currently handling the concession.  

'Several failures'

The NAO concluded that several failures had emerged in the implementation stage of the concession and that these may be “traced to the selection of the VGH as the concessionaire”.

The NAO described this as “a poor choice that set the stage for what was to come.”

The negotiations that quickly followed selection were “similarly flawed, conditioned to an extent by the structural anomalies and organisation of the ministry”.

The NAO criticised the “general ill-preparedness” of the government. 

Although responsibility for the failure rests primarily with the VGH, the situation of default was allowed to persist and even enabled by the government. 

This, the NAO says, was thanks to the government’s successive waivers through which the concessionaire’s inability to secure financing was condoned. 

Aside from failing to deliver an improved health infrastructure, this concession fell short of achieving another critical objective set by the government, that is, the shifting of project expenses off the public balance sheet. 

The NAO’s concern regarding these key shortcomings is heightened when seen within the context of the multiple failures in good governance, accountability and transparency that characterise this flawed concession.