A judge has nullified a controversial decision to hand three hospitals to a consortium, in a damning judgment which puts Joseph Muscat's government under the spotlight.
Gozo General Hospital, St Luke's Hospital and Karin Grech Hospital should be returned to the government because it was riddled with fraud and targets were never met, Judge Francesco Depasquale told a packed courtroom on Friday.
Former PN leader Adrian Delia, who instituted the case against the deal, said the decision was "a victory for Malta".
Reacting, the government said in a statement it was analysing the ruling.
"In any eventuality, the government assures to safeguard the national interest, the employment of all workers and all hospital services."
In a Facebook post, Muscat said all discussions relating to the hospitals had undergone legal scrutiny and went through the Cabinet process.
Independent candidate Arnold Cassola called for the immediate arraignment of Muscat and Mizzi and an international arrest warrant against hospital operators Ram Tumuluri and Armin Ernst.
The Nationalist Party wants the case to be debated in parliament on Monday as Muscat said he has nothing to be afraid of.
The hospitals were given in 2015 to Vitals Global Healthcare, which had no previous experience in managing hospitals. When it failed to live up to its obligations, the concession was handed to US company Steward Healthcare.
At the stroke of a pen, the government signed over the running of St Luke’s, Karin Grech and Gozo hospitals to an unknown outfit with no experience in healthcare.
Two years later, the inexperience was showing as not only were there very few signs of the promised €200 million investment in the three hospitals but Vitals itself was on the brink of financial ruin.
Both Vitals and Steward Healthcare were found to have acted fraudulently in the ruling delivered on Friday.
The judge ruled that there was fraud in three stages of the process. Far before it published its intention to privatise the hospitals, the shareholders of Vitals had already concluded a memorandum of understanding with the government, the judge said.
"It (Vitals) abused its position. Their investors, aware of the political situation at the time, used fraudulent tactics to get the concession," the judge says.
VGH had an apparent conflict of interest which "ought to have led to its disqualification", the court ruled. VGH kept that memorandum of understanding hidden and "that was evidence of its fraudulent intent".
Failed contractual obligations
On his part, Delia had argued that both the original concessionaire and its successor had failed to fulfil contractual obligations including the setting up of a medical school, the creation of state-of-the-art facilities, a medical campus in Malta and Gozo, construction and operation of a regional primary care hub in Gozo besides modernisation of the Gozo General Hospital.
Since neither Vitals nor Steward had missed those important milestones, the concession was to be rescinded and the hospitals “given back to the people.”
Delia and his lawyers summoned a long line of witnesses, including various high-profile figures such as Muscat, Konrad Mizzi who was in charge of the health portfolio at the time of the Vitals deal, as well as current health minister Chris Fearne.
Muscat and Mizzi have both stood by the deal, insisting they acted in the public’s best interest.
By contrast, Mizzi’s successor, Chris Fearne, has been keen to distance himself from the whole affair, saying he had very little to do with the original deal.