The government has tied future administrations to pay €80 million in taxpayers’ money to Vitals Global Healthcare (VGH) to give back the title of the land and buildings of the Karin Grech and Gozo General hospitals, the Times of Malta can reveal.
Also, despite stating that three public hospitals had been given to VGH for 30 years, parts of the concession agreements, kept secret by the government, show that in the case of St Luke’s Hospital, Vitals can keep it and all its grounds for a total of 99 years.
This emerges from leaked details of the multimillion-euro deal signed between the government and VGH – an unknown company in the healthcare sector. The government had blacked out extracts of the deal when it was made available to Parliament.
The Times of Malta is informed that while VGH are currently paying measly ground rent rates for the three hospitals – €309,000 a year for St Luke’s, €59,000 for Karin Grech and €157,000 for the Gozo General Hospital – the government has tied future administrations to paying €80 million if they decide to take back the title on Karin Grech and Gozo’s only general hospital at the end of the 30-year concession period.
In a clause described by hospital industry sources as “scandalous”, the government bound itself to paying Vitals more than 12 times the value of the ground rent that the private company would have paid to the government over a 30-year period.
“The Parties agree that upon the lapse of the Concession Period (30 years) and subject to a notification by the Government of Malta to the Concessionaire (VGH) of at least 24 months prior to the lapse of the Concession period, Government of Malta shall retain the option to request the reversion of title to Karin Grech Rehabilitation Hospital and Gozo General Hospital from the Concessionaire to Government of Malta for a consideration payable by Government of Malta to the concessionaire equal to €80 million,” states the controversial clause hidden by the government.
VGH are currently paying measly ground rent rates for the three hospitals
Also, the agreement makes it possible that in case the government does not take back possession of the two hospitals, Vitals will have the right to extend their concession for another 69 years and to pay just 30 per cent more in ground rent.
Calculations made by this newspaper show that while VGH are expected to pay €6.4 million for 80,563 square metres of land over 30 years, they will get back €80 million at one go at the end of this concession for the Karin Grech and Gozo hospitals.
Health industry sources said that “it is unheard of that on top of the billions that the government has agreed to pay VGH for healthcare services at three public hospitals, they will also be given an extra €80 million to return what was originally owned by Maltese taxpayers”.
The government has bound itself to paying VGH a minimum of €2.1 billion in fees for the provision of healthcare services from the public hospitals.
This stinks to high heaven. Instead of negotiating in our interest, the Muscat-Mizzi-Schembri trio negotiated in the interest of the obscure VGH whose owners remain UNKNOWN. It's daylight robbery. https://t.co/CqQQyOaw2m— Simon Busuttil (@SimonBusuttil) January 16, 2018
The deal, negotiated and signed with VGH by ex-health minister and current Tourism Minister Konrad Mizzi, was back in the news after the surprise announcement just before Christmas that Vitals had sold the government’s concession to Steward Healthcare – an American company – for an undisclosed sum.
The government has not revealed the value of the deal but admitted that it had given its consent for it more than a week after the sale was announced.
Despite that it is the Health Ministry, headed by Deputy Prime Minister Chris Fearne, that pays millions of euros to VGH every year, the written consent authorising the sale of the concession was given by Dr Mizzi through a government-owned company, Projects Malta.
The government has not made available a copy of the written consent. The Office of the Prime Minister has declined to say whether the deal was discussed at Cabinet level prior to the issuance of the consent by Dr Mizzi.
Days before the deal was announced bet-ween VGH and Steward, the Health Ministry got Parliament’s approval to double the 2017 payments to VGH from €16 to €34 million.
The Sunday Times of Malta has said that VGH has not managed to keep to the concession milestones in the agreement signed with the government and has made little or no investment in the three hospitals.
The doctors’ union, MAM, has called upon the government to stop the “fake” deal and take all necessary steps to stop the concession.