When entering a contract, it is assumed that parties are doing so in good faith. That is to say that the parties will deal with each other honestly, fairly and in good faith, so as to not destroy the right of the other party or parties.
A public contract for goods and services is entered into by three parties: the service or good provider, the contracting authority – normally the department of contracts or the government department or agency and finally, the taxpayer who ultimately is paying for the goods and services and should in theory enjoy the benefits of the contract.
It is clear that the Vitals contract lacked the necessary good faith in that the supplier and the contracting authority conspired together from the outset to the detriment of and at the cost of the third party, the taxpayer.
Government officials, including the then Minister for the Economy, and officials from Vitals signed a secret memorandum of understanding before the public procurement process was launched.
This secret deal paved the way for the launch of a flawed procurement process, so flawed that it gifted three state hospitals to Vitals, a company which had no experience in the health sector and no financial backing of any sort to carry out its commitments. That Vitals failed is no surprise.
Martin Balzan, the president of the Medical Association of Malta said that after the introductory meeting with Vitals, he pulled Minister Konrad Mizzi aside and told him quite bluntly that Ram Tumuluri, the person fronting Vitals, had zero knowledge of hospitals.
Konrad Mizzi brushed aside Dr Balzan’s concerns with the same nonchalance attitude that he directed towards all those that questioned this deal.
Mizzi defended this deal even when it became clear to everyone else that Vitals were failing miserably. In January 2018, when Vitals were inexplicably allowed by government to sell on the contract to Steward Healthcare, then Minister Konrad Mizzi assured the taxpayers that their rights were safeguarded by a €9 million bank guarantee.
He reassured us that this bank guarantee is good till May 2018 and if needs be, it will be replaced by another guarantee if it is removed. Despite this assurance, it has since been revealed that the Labour cabinet voted in secret to waive this guarantee. Again, a case where the government and the supplier conspired against the third party: the taxpayer.
The bottom-line in this sorry and dirty saga is that the taxpayer forked out over €240 million to companies that, despite their contractual obligations, gave little nothing in return. We do not know where most of our tax money went. We do not know who the ultimate beneficial owners of Vitals are.
In the absence of a thorough police investigation, we might never find out the full extent of this heist
What we do know is that these negotiations were happening while the then Minister Konrad Mizzi and the then Chief of Staff to the Prime Minister Keith Schembri were desperately trying to open bank accounts overseas for their secret financial structures to be able to channel income from ‘commissions’. We also now know that Keith Schembri was present for the introductory meeting between Vitals and MAM.
In the absence of a thorough police investigation, we might never find out the full extent of this heist. But there are already clear indications for those who want to see the truth. Take the medical school built for Barts in Gozo. The taxpayer funded this school to the tune of €35 million.
Experts in the field expressed surprise at this cost, saying that the school could not have costed more than €5 million at most. How can one moreover explain a Vitals director’s bonus of €5 million when the company is losing millions of euros? You cannot, not unless everything is being done in bad faith.
Stewards are now pointing fingers at government, saying that the authorities failed to do its part and ensure that Vitals carried out their contractual obligations.
Scicluna, who is one of the ministers who survived the cabinet reshuffle, is saying it was not his duty to monitor the works. He wants us to believe that the role of the minister of finance is to raise taxes and not to ensure that they are spent efficiently and effectively. He is of course wrong and he knows it. But all government ministers are now playing the blame-shifting game: it wasn’t me.
Prime Minister Robert Abela said he placed Steward Healthcare on notice. He is expecting them to carry out all their obligations. Fine consolation. This is the most obvious thing that is expected in a contract: for parties to stick to their obligations.
The truth is that Abela knows that the contract is long dead; it was dead before even the ink dried. What remains to be seen is whose reputation is going to sink with this contract. All that Abela is doing now is buying time to ensure that his reputation is not dragged down in this unhealthy mess.
Mario de Marco is a Nationalist MP