For the umpteenth time, Maltese taxpayers have been swindled out of hundreds of millions of euros due to malfeasance in public procurement.
The National Audit Office released a 117-page report slamming St Vincent de Paul Residence for breaching procurement law. The long-term care facility awarded a hefty direct order of €274 million, through a negotiated procedure undertaken directly with a consortium formed between a db Group subsidiary and James Catering Ltd, for the building and operation of a kitchen and four residential blocks accommodating 504 residents.
The government refused to publish the controversial contract that was entered into on November 14, 2017, under the pretext of commercial secrecy.
St Vincent de Paul and the ministry of finance had failed to seek the required budgetary clearance for the disbursement of the money by the government, while the project was not brought before the cabinet for approval.
The NAO found that parliamentary secretaries Justyne Caruana and Anthony Agius Decelis had failed in their duty by incredulously not inquiring about the regularity of the procurement of the project and bring it to the attention of the cabinet through the relevant minister.
Caruana’s excuse was that the focus of all her efforts at the time was the run-up to the 2017 general election while Agius Decelis came out denying that the direct order had been awarded.
What does Prime Minister Robert Abela intend to do about such political non-accountability? Judging by his weak stance on recent serious deliberate abuses and derelictions of duty by various ministers and parliamentary secretaries, he will just look the other way.
This infamous contract originated from a public-private partnership call for tenders that was issued on November 10, 2015 for the construction of a kitchen and the supply of meals to residents and staff at SVP for a 10-year period. The call contained a clause that bound bidders to make an unspecified additional investment that would be compatible with the requirements of the residence. This component was assigned a considerable weighting of 60 per cent, compared to 40 per cent weighting assigned to the kitchen and meals component.
The NAO considered this clause as questionable and the additional investment component weighting as unwarranted.
The winning consortium was awarded a €57 million contact despite a cheaper bid by a competing consortium. The government justified the choice of the consortium on the basis of the additional investment that consisted of the building of two residential blocks accommodating 252 residents.
Subsequently, a negotiated procedure was undertaken directly with the same consortium, that was considered to be beyond the original scope of the tender, which led to the €274 million agreement entered into by SVP with the consortium that increased its additional investment from 252 beds to 504 beds in four blocks.
The winning consortium was awarded a €57 million contact despite a cheaper bid by a competing consortium- Denis Tanti
The failure to award the contract by an open call discriminated against other economic operators who could have readily bid for and provided the services. According to the NAO, this could deem the entire call invalid, apart from having stifled any scope for competition, which, in turn, bore a direct impact on the pricing of the service provided.
The rates charged by the consortium to the residence amount to €118.44 daily per occupied bed night and €110.35 per unoccupied bed night as against the rate of €70 daily per occupied bed charged by the highest priced home. This starkly contradicts the claim by Senior Citizens Minister Michael Farrugia that the contract provides value for money.
The NAO maintained that no real urgency existed to merit a negotiated procedure at such expense and binding the government for a lengthy period. An open procedure could have instead been procured by the residence during the period of at least 18 months that the first two blocks were to be under construction.
It is also pertinent to mention that, on July 8, 2014, a direct contract valued at €2,702,700 had been entered into between the residence and the same db Group subsidiary for the provision of meals over a six-month period. The facility had subsequently used its sole discretionary powers to extend this contract for successive terms until November 10, 2017, without recording its decisions appropriately and ending up paying €13,162,331.
Abela does not appear to be keen on rescinding the contract, while the police have ruled out taking action as the commissioner awaits his probationary period to expire next month. Once again, politics have triumphed over the rule of law.
Abela washed his hands of this case, just as he did after the Vitals Global Healthcare report was published by the NAO last July, which revealed the vitiation of the procurement process and the collusive behaviour between the government and the VGH.
Not only has a perfect environment been created for corruption, bribery and insider dealing at the expense of the taxpayer but those lining their pockets on these deals have been given all the space they need to walk off scot-free.
Another case of breach of public procurement rules involving St Vincent de Paul concerns X-Clean Ltd that was awarded a six-month direct order to provide cleaning services at the facility on April 1, 2015, before the company was even registered by the registry of companies. The company continued to be awarded a contract every few months with the finance ministry’s blessing without a competitive tender being issued and ended up receiving more than €9.5 million in direct orders over a three-and-three-quarter-year period, which exceeds reasonable payment for the provision of cleaning services to the facility.
Over the past eight years, administrative malfeasance seems to have spun out of control at St Vincent de Paul. Following Josianne Cutajar’s appointment as CEO with a package well in excess of €100,000 per annum, serious doubts have arisen about the integrity of the service provided by the facility.
Denis Tanti, former assistant director, health ministry