Updated | Pre-negotiated price for St Philip’s Hospital acquisition

The Maltese government could acquire St Philip's Hospital, a private hospital which will reopen its doors following a public-private partnership lease, within the next eight years at a pre-negotiated price.

The finance and health ministries announced an agreement with the owners of St Philip's Hospital on the lease arrangement of the same hospital for a period of eight years.
 
Government has an option to buy the facility, at the end of every year, from the third year up to the eighth year. The purchase value after three years, inclusive of all lease payments, has been calculated on the final negotiated price of €12.4 million, with the first option to buy at year 3 starting from around €11.3 million to €9.8 million on the eight year. The annual lease cost starts from €825,000 per annum.

Following an expression of interest issued by the owners of St. Philip's Hospital, the health ministry expressed interest in acquiring the hospital which allows for the occupation of the facilities without the need for any major infrastructural works. Following extensive negotiations with the owners by a joint negotiating team between the finance and health ministries, agreement was reached.

The original asking price was of €20 million.

The value of the property was based on a detailed valuation carried out by the technical team of the Foundation for Medical Services (FMS) that took into consideration the state of the property, equipment and development potential.
 
"The decision to consider the St Philip's facility was based on the lower cost it offered to the public purse in developing the originally planned 280-bed rehabilitation facility," the ministries said in a statement. "The overall assessment indicates that expanding the rehabilitation full requirements with the St. Philip's Hospital would be a cheaper option than to build all the facility from scratch. However, since this requires a development permitting process that has a number of uncertainties, the government thought it wiser not to make an outright acquisition, but only to do so if the planning process allows for the facilities' expansion."

Auditors PricewaterhouseCoopers, for the government, and KPMG acting on behalf of Frank Portelli's Golden Shepherd Group, the owners of the hospital, have negotiated a price at which the health ministry would purchase the hospital within the next eight years if it elects to do so.

The agreement will add 110 beds for the national healthcare system but the likelihood is for an extension to the hospital to provide a total of 275 beds on the same footprint without encroaching on the hospital grounds, which are approximately 10 tumuli.

The hospital has four operating theatres and MRI equipment.

Portelli is a former Nationalist MP who last contested for the PN ticket in the European elections of 2009.