The government said this evening that the deal for its acquisition of St Philip's Hospital would be referred to scrutiny by the Auditor-General and the Public Accounts Committee (PAC) after it was signed.

But Opposition leader Joseph Muscat said that would be practically useless, and the scrutiny should be made before the agreement was signed.

The comments were made during an emergency debate held following a request by the Opposition in terms of Standing Order 13 - with no vote being taken.

During the debate Nationalist MP Franco Debono hit out at the government for having agreed to hold this debate - without a vote - rather than debate his own motion on the subject, which would have involved a vote. 

Karmenu VellaKarmenu Vella

USING ST LUKE'S CHEAPER IN THE LONG RUN

At the opening of the debate, Labour MP Karmenu Vella said the Opposition was being critical of the government's lack of planning, its method of procedure and the lack of transparency. The Opposition was concerned that the government could make better use of taxpayers' money.

The Opposition had demanded this debate because government had wanted to go ahead with the deal without parliamentary scrutiny in a way which showed arrogance.

Also worrying was the fact that Health Minister Joseph Cassar himself did not appear to be fully in the picture.

Mr Vella said that according to MFSA documents, the owners of St Philip's, the Golden Shepherd Group, last submitted its audited accounts for the year 2006. This did not show seriousness.

Figures showed that the company had a debt of €10 million at the doubt. One could only imagine how the situation worsened until the hospital closed in 2010.

As for the value of the hospital, in 2006 the company put the property's value at €11.6m. But clearly, that was not the actual market value.

Mr Vella said it was therefore surprising how the government was now estimating the value of the property at €12.4m. How did the government reach this figure?

Mr Vella requested details on how payments would be made. He also asked about the condition of the hospital's equipment, pointing out that the hospital used to have sophisticated MRI equipment which, however, the hospital had not serviced. Would the deal include both the property and the equipment?

The government, he said, had been trying to bypass parliament by going for a lease instead of an outright purchase, but it was clear that the intention was to buy the hospital further down the line. Would the government otherwise plan to extend the hospital to add another 200 beds?

It was ridiculous that this €12m contract was going ahead without any calls for tender or expression of interest, whereas government offices needed to go through a mountain of paperwork just to buy a kettle.  

If this government wanted to downgrade this hospital and its operating theatres into a rehabilitation centre, it might have been cheaper to buy and convert a hotel.

He asked what the government's improvement costs for the hospital would be and whether they would be deducted form the rent.

Mr Vella noted that the health minister had said that it would need €40m to restore St Luke's to function as a hospital once more. But St Luke's, he said, had 800 beds compared to the current 75 at St Philip's, and therefore the conversion of St Luke's would actually turn out to be cheaper.

The MUMN had said Malta needs 500 more hospital beds. Yet St Philip's, even when it was enlarged, would fall well short of that target.

Clearly, this was only a stop-gap solution to free up Mater Dei beds up to the election and the government's intention was only to win votes. This was a political, not a medico-strategic decision, Mr Vella said.

Jeffrey Pullicino OrlandoJeffrey Pullicino Orlando

GOVERNMENT URGED TO RECONSIDER

Independent MP Jeffrey Pullicino Orlando insisted that it was wrong to go ahead with such a deal without having a debate in parliament along the lines of the motion moved by Franco Debono.

He asked how the government was suddenly in a hurry to sign this agreement when talks with the hospital owners had been underway for almost three years.

St Philip's, he said, was devoid of equipment other than what was practically unusable, and returning the property to use after it had been closed for three years could not take place quickly.

Still, it did not make sense to buy a property with operating theatres when what was needed was a rehabilitation hospital, without operating theatres. Why had Dr Portelli not let Times journalists into the hospital to see the state it was in?

Why was the government leasing St Philip's when private investors had been interested in doing so?

Dr Pullicino Orlando also insisted that converting St Luke's into a rehabilitation hospital would have been a cheaper option, since St Luke's had seven times more beds than St Philip's.

Dr Pullicino Orlando urged the government to reconsider and to consider all its options, particularly St Luke's, which was structurally sound, much larger, and already belonged to the government.

Franco DebonoFranco Debono

GOVERNMENT AVOIDING A VOTE

Franco Debono (PN) said this episode was yet further confirmation of why he had no confidence in the government. He could repeat a speech he made a year ago about why he had no confidence in the government, and the situation since then had deteriorated.

This issue stank, he said, and the government had been trying to hide what was going on. He had last week moved a motion against the acquisition of St Philip's but the government had not put it on the agenda, because it feared the vote. It accepted the government's request for an urgent debate only because there would be no vote.

He said he respected hospital owner Frank Portelli, but the state should not offer a bailout when somebody had financial problems.

Dr Debono said the Minister of Health was under constant and heavy criticism from every sector of the health sector. Most of the problems were his own making, and he therefore should not have created a new one, such as this.

This country, Dr Debono said, needed a major clean-up. The fact that this deal was taking place on the eve of a general election and involved a person who had helped return the lost sheep to the PN could not be ignored.

Dr Debono asked whether the Minister of Health was really in charge of this issue or whether there was a hidden hand. Was this a case of orders from above, as former health minister Louis Deguara once said?

Dr Portelli had in the past spoken of his suspicion of corruption in the country. Was there now some sort of blackmail? Did Dr Portelli know something? Should there be an investigation? Everyone knew who he was friends with.

PLANS FOR REHABILITATION HOSPITAL WERE ANNOUNCED IN PN MANIFESTO

Health Minister Joseph Cassar denied that the government lacked strategic vision or was rushing this process. Indeed, the plans for a rehabilitation hospital of some 280 beds was announced in the PN electoral programme.

Health Minister Joe CassarHealth Minister Joe Cassar

St Philip's was offered for sale in 2010 and the government set up a negotiating team to seek the best conditions for the purchase. The initial estimates was made between April and November 2010 and the talks were launched.

He had given information in parliament that same year about the evaluations being made. The government had been clear in its plans.

Dr Cassar said the need for a rehabilitation hospital was borne out by the fact that the population was getting older and rehabilitation facilities needed to be increased.

For the government, the patient always came first. The evaluation was carried out in a serious manner and the savings for the government were considerable.

What were the Opposition's plans? There was a difference between an acute general hospital and a rehabilitation hospital. Was Labour planning to reopen St Luke's as a 500-bed acute general hospital?

This government in the past four years created 850 beds for the elderly. What was unwise in this deal for rehabilitation facilities? The nurses were enthusiastic to work in St Philip's. Why was Labour opposing the deal? Was this political?

82% of the people had said in response to a survey that they were satisfied with health services. But the opposition was always being critical.

Dr Cassar confirmed that rehabilitating St Luke's would cost €39.6m for a 500-bed facility which would be too big. A 260-bed hospital at St Philip's would cost considerably less than even if half of St Luke's was rehabilitated. It would also be cheaper than building a new facility.

Dr Cassar said St Philip's Hospital would initially be used by patients undergoing physical rehabilitation at Mater Dei and the temporary facility at Karin Grech Hospital. More of Karin Grech Hospital would be used for geriatric rehabilitation. As a results more beds would be freed up at Mater Dei.

The outpatients department for rehabilitation, such as prosthetics, would also move to St Philip's.

Dr Cassar asked why all the questions by MPs were being raised now and not in June 2010, when he had spoken of the government's plans?

Dr Cassar said the government had no problem is subjecting the deal to the auditor-general because the patient came first.

He said the Cabinet endorsed this deal last October 1 and further endorsed it this morning, which showed that he was correct in what he said on Dissett last Saturday. 

PM: TALKS WERE LONG AND TORTUOUS

Prime Minister Lawrence Gonzi said the Cabinet was involved in this whole process for two-and-a-half years. There had been times when the talks collapsed and later were restarted. There had been various estimates which contrasted with the valuations of the owners.

The owners had said St Philip's was worth €20 million but the government stood by its figure of €12 million. All options were considered, including using St Luke's and building a new facility on the grounds of St Vincent de Paul home, but the acquisition of St Philip's was the best option in terms of cost and location.

One of the advantages of using St Philip's was that one could have separate facilities for physical and geriatric rehabilitation.

Once the deal was signed, it would be subjected to the Auditor General who would report to the Public Accounts Committee.

The government would retain the option to buy St Philip's after three years, when the matter would again come before parliament.

GOVERNMENT URGED TO STOP ACQUISITION PROCESS

Marie-Louise Coleiro Preca, opposition spokesman for health, said that if the government had nothing to hide, it should stop this process until the deal was scrutinised and proper consultation was held with the health care professionals.

Marie-Louise Coleiro PrecaMarie-Louise Coleiro Preca

Reacting to Dr Cassar's claims that the patient came first, Ms Coleiro-Preca said the patients who were kept hours waiting for a bed at Mater Dei might have a different opinion, as would those at Gozo hospital.

She asked how much had been paid to Skanska for a rehabilitation centre at Mater Dei which never materialised, and for the plans for a rehabilitation facility at St Vincent de Paul, which also did not see the light of day.

The Labour MP asked what facilities would be available for rehabilitation patients at St Philip's. What about hydrotherapy facilities, currently available at St Luke's? What about community rehab services and the neuro-rehabilitation unit?

Furthermore, was it true that €2m would be needed just to restore the air-conditioning system at St Philip's? Was it true that the boilers did not work and there were problems for the MRI?

FENECH: GOVERNMENT HELD FIRM TO ITS VALUATION

Finance Minister Tonio Fenech defended the procedure followed by the government and denied that parliament had been bypassed. He said the procurement regulations and the Land Disposal Act did not apply for lease. Of course, that did not remove the duty of due care and the government had respected its duties.

Finance Minister Tonio FenechFinance Minister Tonio Fenech

When St Philip's became available, the government made a submission of interest and in holding detailed negotiations it considered all its options including St Luke's and building a new facility. St Philip's was cheaper and most favourable.

Mr Fenech said he never met St Philip's owner Frank Portelli, whether formally or informally, in order to keep the distance between the negotiators and the owners.

Various valuations were made. For the sellers, David Xuereb Associates gave an estimate of  €20.5m and Bencini Associates said €18.7m.

The Government Property Division gave a property estimate of  €16.9m and  the Foundation for Medical Services said €11.85m excluding the medical equipment - which was valued at €275,000.

The government therefore stuck to a value of just over €12.4m. This showed how the government was not chummy with its friend Frank Portelli when even the Government Property Division gave a valuation of over €16m.

Referring to Mr Vella's comments, Mr Fenech said the financial position of the Good Shepherd Group were irrelevant to the government as it was leasing the property not buying the company. And it was using its valuations, not the company's.

The government's valuation was a stumbling block which held up the talks for two years. It was a case of take it or leave it for the government. 

The deal did not provide for any tax exemptions including capital gains tax if the outright purchase took place.

Mr Fenech said the government had chosen to lease with an option to buy in order to ensure that it had a Mepa permit to enlarge the building, before it chose to buy it.

Before deciding to purchase the property the government would go before the Public Accounts Committee, Mr Fenech promised.

MUSCAT: SCRUTINY MUST COME BEFORE SIGNING

Concluding the debate, Opposition leader Joseph Muscat said the Opposition never wanted to stop the deal because it did not know what it involved. It, therefore, wanted parliamentary scrutiny. The government was refusing to table the deal before it was signed and was ready to subject it to the Auditor-General and the PAC afterwards. It was like holding an autopsy.

Joseph Muscat.Joseph Muscat.

He suggested that the deal should be halted and scrutinised by the PAC and the Auditor-General before going ahead or being improved or withdrawn.

This, he said, was common sense and he could not understand why the government was refusing it.

He said the government through its speeches and documents was contradicting itself, particularly on when this acquisition process started.

He said he seriously doubted whether the government had considered all avenues on the best building for use as a rehabilitation hospital. The Opposition, without the studies in hand, could not say that St Luke's was a better option, but he suspected that the reason was political because the reopening of St Luke's would be an admission of government health policy failures. 

Dr Muscat noted that the government was planning to raise bed capacity by 300% by enlarging St Philip's. Did this mean that the patients who used the current 100 beds would effectively be in a construction site? And what about parking and the rules on planning gain?

Dr Muscat said the Opposition was ready to work with the government for quick but proper parliamentary scrutiny of this deal, but if the government refused, it would only be handing a political gift to the opposition.

The debate ended at 10.08 p.m.

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