Steward will take over the management of the three hospitals next week – Konrad Mizzi

Tourism Minister Konrad Mizzi yesterday refused to answer questions by The Malta Independent on why VGH has been forced to sell its 30-year concession to manage three state hospitals 21 months into its operation, insisting that the deal is a private negotiation between two parties despite being reminded of the public’s serious concerns with the sale.

The Minister, who is also responsible for Public-Private Partnerships, also revealed that Steward Health Care will take over the management of the three hospitals next week. Negotiations on the sale were revealed to have begun in September by Deputy Prime Minister Chris Fearne on television last night.

The Malta Independent approached Mizzi, who was the health minister until he was stripped of this remit when he was exposed to have an offshore account in Panama, to ask whether he was aware that VGH was in dire financial straits and consequently unable to meet its construction deadlines for almost a full year.

The Minister insisted that the government had taken all the necessary precautions to ensure that VGH followed its obligations within the concession, and employed a number of committees to monitor the company.

Projects Malta plays a role in two of the three committees, one which deals with quality assurance and other that handles hospital construction.

Sources had also told this newspaper that there were several issues regarding construction deadlines within the construction committee.

A third committee, meanwhile, deals with project management and comprises members from both VGH and the government.

Pressed as to provide a reason as to why VGH was selling its 30-year concession 21 months into operations, Mizzi said that the government does not enter the sale process of a deal between two parties and that the transfer of shares was in accordance with the agreement.

He was reminded that the government still remains a shareholder of the project, given that it is a PPP, and that the public deserved answers, however, Mizzi suggested that these questions should be addressed to the seller.

Asked whether the sale of three state hospitals to an inexperienced company who appears to be financially incapable of running the project, should warrant his resignation, the minister appeared bemused insisting that the PPP was an inter-ministerial project and that VGH had performed according to its obligations.

“Our duty is to ensure that the concession is honoured to the letter.”

The Times of Malta had earlier carried a story regarding a €9 million performance guarantee signed upon the signing of the concession, which bound VGH to “an unconditional and irrevocable on demand prime bank guarantee issued by a bank duly licensed to carry out banking activities in Malta or an EU Member State and acceptable to the government of Malta”.

Asked to be provided with the name of the bank, the Minister would not provide an answer, insisting that it was an “international, reputable bank” but that he could not remember the name.

The guarantee, he explained, will now be transferred to Steward.