The European Commission was asked to look into the 2015 agreement between the government and Vitals Global Healthcare a day after VGH finalised a deal with a US company on three Maltese hospitals.
Nationalist MEP Roberta Metsola wrote to Commission vice president Frans Timmermans calling on the EU executive “to use all the tools available to look into the finer details of the deal, in the context of the rule of law discussions, public procurement rules and with regard to Directive 2014/23/EU (award on concession contracts) and Directive 2014/24/EU (public procurement) and act to protect the interests of the EU, Malta and its citizens”.
Nationalist party leader Adrian Delia on Monday initiated judicial proceedings asking the court to nullify the transfer of the hospitals to a private entity.
The deal, through which Vitals passed the 30-year, €2.1 billion concession to Steward Health Care, was sealed on Monday following the lifting of a court injunction requested by one of the original investors, Ashok Rattehalli, an American citizen, after obtaining five per cent of the shares.
The rest of the shares in Vitals were passed on to Steward Health Care International Ltd, a company registered in Malta by Ganado Advocates last November 1, weeks before Health Minister Chris Fearne made the surprise announcement, on December 21, that Vitals had sold its concession to Steward.
The declared value of Vitals shares was rendered almost nil
According to documents presented in the companies registry on Monday, Vitals and its directors, Ram Tumuluri, a Canadian, and Edward Pawley, who holds a British passport and resides in Singapore, are no longer connected to the project.
Michal Callum and Armin Ernst, a former Vitals CEO, are the sole directors of Steward Health Care International Ltd.
Read: Ex-Vitals CEO is now president of Steward
Vitals ended up facing serious financial problems and heavy debts despite receiving more than €50 million from the government coffers without making any significant investment in the St Luke’s, Karin Grech and Gozo hospitals.
Neither Steward nor the government has so far provided any details about the deal struck with Vitals.
However, Vitals sources said the declared value of Vitals shares had been rendered almost worthless, with Steward now taking over about €55 million in debt accumulated by Vitals.
Read: VGH had no money to pay salaries last month
Vitals has yet to indicate where the €50 million received from the government ended up.
When publishing the contract with Vitals in Parliament, the government redacted many parts, citing commercial sensitivity. However, information about the deal that reached this newspaper showed that all the contents of the three hospitals had been transferred to Vitals for just €1.
The government committed to paying the concessionaire over €180,000 a day for the duration of the concession for the use of the hospital facilities. It also agreed to pay €80 million to the concessionaire to take back two of the three public hospitals – Karin Grech and Gozo hospital – at the end of the 30 years and signed off St Luke’s, the largest of the three, for 99 years.
The Times of Malta reported that at the end of the concession, the government agreed to assume all the concessionaire’s debts and pay it an extra €100 million over and above the €2.1 billion.
The Auditor General is investigating the VGH deal.