The government said this evening that the signing of the St Philip’s Hospital deal will go ahead.

The private hospital will be leased for €825,000 per year for eight years with an option to buy after the third year. The purchase value after three years, inclusive of all lease payments, has been calculated on the final negotiated price of €12.4 million. The first option to buy is in the third year starting from around €11.3 million to €9.8 million on the eighth year.

The government said in a statement that the agreement for the lease of the hospital has to be signed immediately because of the acute shortage of beds for rehabilitation purposes.

It said that immediately following the signing of the lease agreement, it would submit the contract to the auditor-general for a full review and evaluation of the process.

The report would then be presented to the Public Accounts Committee for full parliamentary scrutiny.

It insisted that the rent or acquisition of property by government was not subject to Parliamentary approval.

It said that at this stage, it was not purchasing but renting the property, with the purchasing option only exercisable as from the third year.

If it decided to exercise the purchase option in future, it would report to the Public Accounts Committee the reasons for the decision at that point in time and signature would only take place once the PAC review was completed.

Following the government’s announcement of the deal, backbencher Franco Debono, who has opposed most government moves since Parliament rose from recess, tabled a motion in Parliament calling for the agreement to be scrutinised by Parliament before being signed.

Both Labour and Jeffrey Pullicino Orlando agreed that this should be the way forward but hospital owner Frank Portelli, a former Nationalist MP, expressed surprise at the recent criticism and said that although he did not have any objection to the scrutiny of the Public Accounts Committee, the deal was negotiated and agreed with the Government and not with the PAC.

He accused Dr Pullicino Orlando and Dr Debono of transferring their hate towards Richard Cachia Caruana onto him and expressed surprise at Labour’s reaction.

Dr Pullicino Orlando this morning said it was ridiculous of Dr Portelli to suggest that he asked for the St Philip’s Hospital deal to be subjected to parliamentary scrutiny because of his close ties with Mr Cachia Caruana.

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