The private sector will be asked to develop and run the Gozo and St Luke's hospitals under a government investment proposal worth €200 million.

The ambitious plan was unveiled this morning by Prime Minister Joseph Muscat, Health Minister Konrad Mizzi and other government ministers.

Under the terms of the proposed public-private partnership the private investor will be responsible for the capital expenditure and will be given the facility to operate a private hospital on both sites.

However, the government will be contracting hundreds of beds for use by the public health system.

Dr Muscat said the plan will represent "a step change" in healthcare and will put free healthcare on a sustainable footing while creating an economic niche.

Health Minister Konrad Mizzi said healthcare will remain free while services will improve.

He explained the price the government will pay for the beds contracted from the private operator will be equivalent to current running costs for the Gozo Hospital, the various facilities still operating from St Luke's and the Karen Grech rehabilitation hospital.

A request for proposals seeking interested private investors will be issued in 10 days with the government expecting to choose the preferred bidder by year's end.

Dr Mizzi said the medical hubs in Gozo and St Luke's will complement Mater Dei Hospital.

Services offered at the Gozo Hospital will make it possible for Gozitans to receive the vast majority of medical treatment in Gozo without the need to come to Malta.

Health Parliamentary Secretary Chris Fearne described this development as "the writing of a new page" in Malta's medical history.

Mr Fearne said Mater Dei was a small hospital and only drastic solutions could solve the problem of patients in the corridors.

He added talks with unions representing health workers and professionals were ongoing.

Medical campus

The government this morning also signed an agreement with the UK university Barts for the opening of a medical campus on the site of the Gozo Hospital.

The campus, which will be Barts's first overseas medical campus, will host 300 students and the first intake of 60 students is expected at the end of 2016.

Anthony Warrens, dean for education at Barts, said the medical school in Gozo will offer the same curriculum as the London college medical school.

Collaboration will be of an academic and medical research nature and the first student intake will happen in September next year.

Dr Muscat said the investment by Barts will represent the single largest foreign investment Gozo has ever seen and will attract students from around the world.

"This is no small project... Barts is part of a medical cluster in Gozo that will include a hospital for Maltese and a private hospital to attract medical tourists," Dr Muscat said, describing this as a win-win situation.

Mr Fearne said the private hospitals part of the plan will attract medical tourism that will make the idea a sustainable one, he added.

Dr Mizzi said there was considerable foreign interest in developing medical tourism through the building of private hospitals.

The plan

The investor will build a new acute 250-bed hospital in Gozo alongside the medical campus and the current building will transform into a 175-bed geriatric hospital.

The private operator will use 125 of the acute beds for fee paying foreigners to attract medical tourism to Gozo.

These beds will be used by the public health system with the investor retaining a few beds for private use.

The site will also host a health centre offering primary care services to complement the one that already exists in Victoria.

St Luke's will also be expected to undergo a massive facelift. The private investor will use part of the existing building for a 250-bed acute private hospital and another part for an 80-bed rehabilitation hospital that will be contracted out by the government. Karin Grech, which currently houses the rehabilitation hospital will change into a 270-bed geriatric hospital for public use.

St Luke's will also house a 12-bed dermatology centre, which will move out of Boffa Hospital.

All current employees at the existing centres will be retained on government's books but the hospitals will be run by the private sector.

The plan is expected to create 1,200 jobs, ranging from medicine to administration.

Reduce pressure

The additional beds that will be created, including the geriatric hospitals, will help reduce the pressure on beds at Mater Dei Hospital.

The plan also complements the government's construction of a new wing at Mater Dei that will house 300 acute beds.

PN reaction

The Nationalist Party in a statement said it welcomed private sector investment in the health sector, but wished to know more details about the agreement signed this morning. It noted that similar deals on private sector involvement were signed in the past.

The party noted that trade unions involved in the health sector were not invited, let alone consulted, about this deal.