Family Minister Michael Falzon has admitted that a controversial multi-million euro contract to build and manage four new blocks at St Vincent de Paul Residence, signed on his watch, should have sought cabinet approval.
But he insists this does not mean there was anything wrong with the €274 million deal, saying the National Audit Office should issue a “correction” over some of its findings.
Last week, the NAO issued a report saying the contract at the residence for the elderly, awarded by direct order in 2017, broke procurement law, might not represent value for money and could be deemed invalid.
The damning report also criticised the absence of “any form of political authorisation” and the fact it was “not brought to the attention of cabinet, despite the materiality of the expenditure and the fact that this project was one of national importance”.
Last week, Prime Minister Robert Abela questioned why the contract awarded to a consortium made up of James Caterers Ltd and a subsidiary of the DB Group was not raised at cabinet level during his predecessor’s administration.
Times of Malta on Wednesday asked Falzon, who was minister when the contract was awarded by negotiated procedure in November 2017, why he had not raised the issue with his cabinet colleagues.
I agree with what the prime minister said
“I can assure you that I agree perfectly with what the prime minister said but one has to see in this case that, yes, this is something that could have happened but the fact that it didn’t doesn’t necessarily mean that something wrong has happened,” Falzon said.
“It’s more of a question of how one can improve procedure and if you can, then you should do so.”
To present an item to cabinet, a memo must be drafted and signed by the minister responsible outlining the issue for discussion. While parliamentary secretaries and other civil servants may be involved at various stages in the drafting of a memo it is ultimately the minister who is politically responsible.
The audit office said the lack of a competitive tender led to “significant doubts” over whether the deal represented value for money. It highlighted the “significant discrepancy” between the high rates the government pays to the consortium and the cost of buying beds from the private sector.
Without specifying, Falzon said he expected a “correction” regarding the value for money concerns.
“The Auditor-General has made his report and, personally, I expect to see a correction from such a serious institution because they’ve compared the price of Mercedes Benz to a 40-year-old Fiat 500,” Falzon said.
“Of course, this is the auditor’s opinion but I am convinced that this situation will be rectified.”
The SVPR deal overlaps two administrations where political responsibility is concerned.
The relationship between the home and the consortium began in 2014 when a direct contract for catering services was awarded under then minister Michael Farrugia. In 2017, after the consortium had won the tender and the contract was amended significantly after the additional investment, responsibility for the deal fell on Falzon.
After the consortium won the bid, the “additional investment” was amended to include the construction of four new residential blocks, which the government sought and obtained authorisation for by citing extreme urgency.
The NAO found that no such reasons existed and that the deal should have been opened to external competition.
The police said yesterday they would not be conducting an investigation into the auditor’s report, noting that no such investigation is necessary at this time.