The contract for the lease of St Philip’s Hospital will be signed in the coming days, according to Finance Minister Tonio Fenech.

It would create a bad precedent if the Opposition gets its way

A day after Parliament discussed the agreement in an emergency session, Mr Fenech told The Times the contract was being finalised by lawyers.

“This goes to show how serious we are and it will be signed in the coming days,” he said when asked whether a date had been set.

St Philip’s, a 100-bed hospital, closed down more than two years ago after running into financial problems.

The Government wants to lease the hospital from former Nationalist Party MP and president Frank Portelli for €850,000 a year to use as a rehabilitation facility.

The lease agreement is for eight years, with the Government having the option of buying it outright from the third year onwards, based on a valuation of €12.4 million.

Mr Fenech yesterday defended the Government’s decision to submit the lease agreement to parliamentary scrutiny only after it is signed, insisting that the law was on the Government’s side.

“Everyone should respect the country’s procedures and it would create a bad precedent if the Opposition gets its way and the contract is scrutinised before signing simply because the person involved happens to be Frank Portelli,” Mr Fenech said.

The contract would eventually be made available for scrutiny by the Auditor General and Parliament’s Public Accounts Committee, he added.

The timing of the sale happens to be vital for Dr Portelli, whose house was set to be auctioned off in court tomorrow after pharmaceutical company Charles de Giorgio Ltd obtained a judicial sale to recoup money he owed it.

The auction has been put off, with Charles de Giorgio Ltd managing director David Stellini declining to comment on the matter.

Court sources said Dr Portelli filed a judicial application to have the auctioned property changed from his house to two flats. No date has been set yet.

The Government’s decision not to submit the contract for scrutiny prior to its signing has been harshly criticised by the Labour Party, independent MP Jeffrey Pullicino Orlando and PN backbencher Franco Debono.

Dr Debono has also submitted a private member’s motion calling for the contract to be withdrawn pending parliamentary scrutiny.

Opposition leader Joseph Muscat yesterday announced that Public Accounts Committee chairman Charles Mangion, a PL MP, had written to committee members proposing an agenda for scrutinising the contract.

Health Minister Joe Cassar has insisted there is nothing secretive about the deal and said Parliament was informed of initial evaluations in 2010.

Rehabilitating St Luke’s Hospital, which is many times larger than St Philip’s, would cost almost €40 million, Dr Cassar noted in Parliament on Monday.

His ministerial colleague Mr Fenech also argued that the negotiated €12.4 million price for St Philip’s was significantly lower than the various other valuations provided, including those from the Government’s own property division.

The final valuation on the deal is similar to the book value assigned to the land and buildings in the last published accounts of the Golden Shepherd Group, which ran the hospital.

According to the financial statements of December 2006, the land and buildings were valued at €11.6 million, raising the book value by almost €7 million on previous valuations.

PL health spokeswoman Marie-Louise Coleiro Preca has claimed the hospital is in a state of disarray, with the building’s air conditioning system requiring €2 million repairs, a broken nurse call system and wrecked boilers and soffits.

Dr Portelli had said last week that the hospital could be ready to take in patients “within a few weeks”. However, he refused a request by The Times to be given a tour of the closed hospital before the deal was sealed.

Questions sent to the Health Ministry asking about Ms Coleiro-Preca’s claims went unanswered.

The questions also sought to clarify what sort of financial outlay, as well as timeframe, would be needed to transform the existing 100-bed facility into the 275-bed rehabilitation hospital the Government envisages.

Dr Portelli declined to speak to The Times yesterday and instead asked for questions to be e-mailed to him. These included a second request to visit the hospital premises. He had not replied at the time of writing.

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