The investor group behind Vitals Global Healthcare signed a Memorandum of Understanding (MoU) with the government before it actually won the tender to run three State-owned hospitals, leaked documents show.

The MoU is mentioned in a presentation dated February 2015 given to financial institutions by Vitals in Malta.

The request for proposals to take over the running of the three hospitals was only published in April 2015, and the tender was officially awarded to Vitals the following September.

The presentation gave specific details about what the project would entail, including bed figures, payments by the government and the duration of the concession

Projects Malta, which falls under Minister Konrad Mizzi’s control, issued the request for proposals.

The presentation by Vitals says the government would provide the site and buildings that were then occupied by the Gozo General Hospital, St Luke’s and Karen Grech for a minimum period of 99 years.

Officially, the government said the lease period would be 30 years. It has in the past denied reports by this paper that a clause in the contract gives the company the right to extend its emphyteutical grant by a further “single and additional term of sixty-nine years”.

Three heavily redacted contracts governing the deal were published in Parliament last October.  A spokeswoman for Vitals said the presentation she thought this paper was referring to was based on a number of “assumptions” that the company’s financial advisors had made from information gathered through publicly available information and reports from audit firms, on the basis of which it was believed the project could be feasible.

While the government said Vitals would invest €220 million in the project, the leaked documents say the investment would be €164 million.

We were informed that our ideas were not in line with Malta Enterprise’s objectives

They say the annual operational guarantee by the government for all three hospitals would be €70 million.

If the committed beds were full and the government needed further beds, they would be charged €650 per day for acute care beds and €125 per bed per day for long-term care.

Additional rehabilitation beds at St Luke’s would cost the government €300, while geriatric beds would cost €125 per day.

Vitals said in the presentation that the government would provide a €10 million financial grant towards the Gozo medical complex.

The Vitals spokeswoman said that no such grant was ever contracted or received by the company.

Towards the end of the presentation, Vitals said the “next steps” would be finalising the terms between the investor group and the government.

This included signing the “final, definitive agreement” and articulation of “the terms and conditions of the grant of the designated area by the government to the investor group”.

The Vitals spokeswoman said the group had originally presented its ideas on health services to Malta Enterprise.

“These ideas focused on solely redeveloping the Gozo General Hospital into a world-class medical facility.

“We were informed that our ideas were not in line with Malta Enterprise’s objectives, since they were seeking to develop a more ambitious project which covered multiple sites in Malta and Gozo with clear objectives of improved patient care at no cost to individuals who are currently entitled to free health care,” the spokeswoman said.

Vitals then went back to the drawing board to assess if it could form a business model to address Malta Enterprise’s objectives, the spokeswoman continued.

After discussing financing options, Malta Enterprise made Vitals aware that the government intended to issue a public call for a healthcare project, the spokeswoman said. “We submitted our proposal without the involvement of some of the initial parties who worked on the presentation you may be referring to.”

A freedom of information request for the MoU, signed by the government with Vitals before the tender was issued, has been rejected by Malta Enterprise on the basis that negotiations with potential investors are covered by confidentiality clauses.

Projects Malta has also rejected a freedom of information request asking for the due diligence processes carried out on Vitals.

The Opposition has in the past queried the ownership layers of Vitals, which pass through multiple companies in the British Virgin Islands and lead up to a Singapore-based investment group, Oxley Capital.

The contract is being investigated by the Auditor General.

jacob.borg@timesofmalta.com