A hotel part-owned by construction magnate Joseph Portelli received €3.1 million from the government to host elderly patients during the COVID-19 pandemic.

In April 2020, elderly patients at the Gozo hospital’s Sant Anna ward were moved to the Downtown Hotel in Rabat, so that the ward could be repurposed for COVID patients.

A probe by the auditor general, published in November, highlighted the lack of available documentation, including market research, justifying the choice of Downtown.

The auditor general also found that the initial value of the rental agreement, put at €950,000, was raised to €1.6 million over the course of just one day.

Among the reasons justifying the increase, the Gozo Ministry said the hotel included restaurant facilities, a staffed reception area and alterations to the property in order to accommodate 80 elderly patients.

The auditor general drily noted that the above reasons are “basic requirements” tied to any rental agreement, and therefore should have been included in the original €950,000 contract cost.

In total, the Gozo Ministry paid €3.1 million to rent the hotel between April 2020 and December 2021.

These costs do not include the actual care of the elderly patients, as this was paid for from funds allocated by the government to Steward Health Care, the American company that runs the Gozo hospital.

Other costs not factored into the Downtown rental agreement included utilities and food, the auditor general said.

In a comparative exercise, the auditor general established that the expense of the Downtown rental deal meant the costs of hosting and caring for the elderly patients exceeded the highest fees charged by homes for the elderly.

While conceding on the one hand that governments often become price-takers in emergencies such as the COVID-19 pandemic, the Auditor General said that on the flipside, good governance takes on a more important role to mitigate the ensuing risks emanating from dealing rapidly with urgent emergency situations.

Adequate documentation and robust audit trails were not always present to support the decision to rent the Downtown to accommodate elderly residents, the auditor general said.

A probe by the Standards Commissioner last year ruled that Gozo Minister Clint Camilleri had not abused his power by awarding the rental deal to the hotel via a direct order, instead of issuing a call for tenders.