Parliament dissects outlines of St Philip's hospital deal

A request tabled by Opposition leader Joseph Muscat led both sides of the House to a debate on the government's decision to steam ahead with the €12 million lease-and-buy option for the private St Philip's Hospital.

The three-hour debate was not conditional on a vot, since parliament was not discussing a motion. Citing Standing Order 13, Muscat said the request was being tabled in order to ensure that the acquisition of the hospital does not impinge upon future acquisitions.

"The urgency of this debate stems from the importance of health and the failure of government to give a detailed account of the acquisition," Muscat said. He added that the majority of House and media were pressing for a discussion on the matter.

On his part, Prime Minister Lawrence Gonzi said he had "no difficulty in discussing" the acqusition and insisted that the government will prove the transparency of the deal.

Gonzi also insisted that the contract had not yet been signed with the Golden Shepherd Group, the owners of the hospital.

Kicking off the debate, Labour MP Karmenu Vella accused the government of having no clear strategy in the health sector, hitting out at the lack of transparency on the deal. "The Opposition is concerned that the government could make better use of the taxpayers' money. We are also demanding this debate because government wanted to go ahead with the deal without parliamentary scrutiny in an arrogant way," Vella said.

Vella explained that according to MFSA records, the owners of St Philip's, the Golden Shepherd Group, last submitted its audited accounts for the year 2006 which reflected a lack of transparency and seriousness. The Labour MP said figures showed that the company had a debt of €10 million at the time, and an additional €10 million in losses. "One can only imagine that the situation now is much worse as the hospital has not operated since 2010."

Vella also cast doubt on the real market value of the property, tagged at €11.6 million by the owners in 2006, and now estimated by government valuers at €12.4m. "How did the government reach this figure?" Vella asked.

Vella said the government would never reveal the real reasons behind the hurried deal and shed doubts on the wisdom to rent an unused hospital, instead of issuing a call for applications as is normally done when government buys or rents property or equipment.

He said that a number of persons were interested in offering other properties to be converted as a rehabilitation hospital. "Our criticism is not towards Mater Dei Hospital but towards the governmnenbt who never understood the needs of the country," Vella said.

Addressing the House, independent MP Jeffrey Pullicino Orlando said the emergency discussion could have taken place earlier if the government showed more willingness to discuss the deal during the House Business Committee meeting last week.

Among the questions Pullicino Orlando posed, he asked: "Who is taking the decision if the Cabinet was not responsible for the deal? Why all this hurry? If negations took three years, why all this hurry to steamroll the deal?"

He insisted that it was wrong to go ahead with the deal without having a debate in Parliament along the lines of the motion moved by Nationalist MP Franco Debono. The independent MP also insisted that the St Philip's Hospital was devoid of all equipment as most of it had been sold and shed doubts on the state of the little equipment left.

Pullicino Orlando argued that it would have been a wiser option to invest in the former general hospital at St Luke's in Pieta. "Who in his right senses will give the hospital back to the owner after investing millions on the site?" Pullicino Orlando asked, adding that for this reason it was a foregone conclusion that the government will purchase the hospital outright at the end of the lease.

He hit out at the "arrogance" of the St Philip's Hospital owner, Frank Portelli, who refused entry to journalists at his hospital to verify the state of the hospital. "Hopefully it has ben worked out how much it would have cost to set up a 100-bed rehabilitation hospital at St Luke's," the MP said. He added that from information he has, the same amount of money per bed will be spent to transform St Philip's Hospital as it would take to transform St Luke's.

On his part, Nationalist MP Franco Debono said the state of affairs has deteriorated since the January crisis when he had abstained in a vote of confidence in government.

Debono asked why the government refused to have his motion discussed but had not opposed this evening's emergency debate. "I'll tell you why Mr Speaker. The government is scared of taking a vote. When there is no vote to be taken the government shows its magnanimity, but when a vote is up the government avoids it."

While saying that he respected St Philip's Hospital owner Frank Portelli, Debono said that the state "should never offer a bailout when somebody has financial problems."

Debono said the health minister was coming under a blitz of criticism and said: "Most of the problems ware of his own making, and he therefore should not have created a new one, such as this."

In one of his typical moments of sharp and humorous rhetoric, Debono said he had convinced a number of voters in his constituency to vote PN instead of Labour in the run-up to the 2008 election. However he said these same people are now angry at him for having convinced them to vote PN as he was cheered by the Opposition MPs.  

Referring to Portelli's friendship with former EU ambassador and PN strategist Richard Cachia Caruana, the MP said the hospital owner had in the past spoken of alleged corruption but nothing ever happened. He questioned whether there was any ulterior motive behind the deal.

Debono never mentioned Cachia Caruana by name but instead referred to "the long-tailed rats who make decisions from the top."

"Is this some sort of blackmail? Did Portelli know something? Should there be an investigation? Everyone knew who he is friends with," the MP said. "There must be something wrong with this deal. We are not a country of fools," a feisty Debono said.

He insisted that the country needs a major clean-up and stressed that the very fact that this deal was taking place on the eve of a general election and involved a person who had helped the PN win the last election called for serious investigations. Debono asked whether health minister Joe Cassar was really behind the deal or whether there was a hidden hand orchestrating the deal.

Following Debono's sharp-witted address, the health minister Joe Cassar defended his corner with a spirited speech. In an address which provoked a number of interruptions by Jeffrey Pullicino Orlando, Cassar said the majority of the Maltese people are satisfied ith the health services offered and insisted that the government chose the cheapest option in striking a deal with St Philip's Hospital.

He explained that if the government had decided to set up a rehabilitation hospital at St Vincent de Paule it would have cost €50 million, while it would have cost €39 million to set it up at St Luke's.

Cassar said that if the government decides to go through with the purchase of St Philip's Hospital, it will cost €25 million. "We have always put the patients at the forefront of our policies. On the other hand the Opposition is only trying to score electoral points. We put the patients before votes," Cassar said.

Insisting that there is nothing wrong with the deal, Cassar asked why the Opposition or other government MPs did not raise their objections when negotiations started in 2010.

At this point Pullicino Orlando raised a point of order and clarified that he was surely not trying to score electoral points as he will not be contesting elections. Cassar retorted that the decision was taken by the Cabinet and denied that the decision was taken without the Cabinet's approval.

In a brief intervention, Prime Minister Lawrence Gonzi insisted that the contract was not signed and backed the health minister's claims that the Cabinet had discussed the issue on Monday morning.

"The Cabinet discussed the deal for more than two years. The issue was on the agenda several times and proposals were shot down and debated seriously. The hospital was being estimated at €20 million by the owner and government stood its ground on its own valuation of €12 million and here we are today," Gonzi said.

The Prime Minister said the government had weighed up all options, including that of converting Zammit Clapp Hospital in St Julian's as a rehabilitation hospital and after evaluating its options the government chose to lease St Philip's Hospital.

He added that all documents and details of the deal will be made public and will be tabled in Parliament. Gonzi said the deal will be scrutinized freely by the Auditor General and Parliament.  

Labour MP Marie Louise Coleiro Preca said the government was treating the whole country badly and should not have waited to be prompted by the Opposition and some other MPs to discuss the deal in Parliament.

She added that the Parliament must be consulted and involved in the process of identifying the best premises where the rehabilitation hospital is set up. "You have done nothing since 2008 in regards to the creation of a rehabilitation hospital. Why are you so concerned and in a hurry now, minister Cassar?" Coleiro Preca asked.  

She pointed out that St Philip's Hospital was not equipped to offer all services needed for a rehabilitation hospital and asked whether services will be farmed-out to other entities. "What about hydrotherapy facilities, currently available at St Luke's?" the MP asked.

"If the government has nothing to hide, it should bring the deal to a halt until the deal is scrutinised and proper consultation is held with the health care professionals," Coleiro Preca said.

The Labour spokesperson on health said that while the health minister accuses the Opposition of not caring for the patients, "the minister is now feeling the urgency in the run-up to the election and is hiding the facts from the country."

"The government is duty-bound to tell us what exactly will be in place at St Philip's Hospital. The government is duty-bound to tell us what kind of equipment is available and whether St Philip's will be a complete rehabilitation centre."

Finance minister Tonio Fenech, the last speaker from the government's side, said the deal respects the procedures followed in the procurement of land or property by the government.

He said the procurement regulations and the Land Disposal Act did not apply for lease deals. "Claims that we have by-passed Parliament in this deal are untrue because such decisions are taken by the executive. The Public Accounts Committee and the Auditor General then has the right to scrutinise the deal."

Fenech insisted that when St Philip's Hospital became available, the government made a submission of interest and held detailed negotiations during which all options were considered, including converting St Luke's and building a new facility. "However, St Philip's Hospital was the cheapest and most favourable option," Fenech said.

Fenech also stressed that he never met Frank Portelli formally or informally and never participated in the negotiations.

Closing the debate, Opposition leader Joseph Muscat said the government had failed in the health sector and that it had no strategy in the sector. He said the government was still in time to suspend the deal and demonstrate that the two sides could work together for the benefit of the whole country.

"Tonight we have watched a sorry spectacle in which government is tripping itself up. If the government is correct in saying that there is nothing wrong with the deal then it should not have shied away from discussing the deal in Parliament," Muscat said.

He said the Opposition is still not satisfied because the details of the deal are not available and the government wants Parliament to carry out an analysis once the deal is sealed.

Echoing Nationalist MP Franco Debono, the Labour leader said: "The government accepted this discussion because there is no voting involved. In fact I am convinced the government would have lost the vote."

Muscat urged the government to suspend the deal and send the contract to the Public Accounts Committee and "if we are in agreement the deal will go ahead. What is the value of having an analysis when the deal is done?"

"I do not exclude that St Philip's is the best deal on the table. However we must ensure that all options were given their due consideration," Muscat said.

He added that the reason St Luke's was not considered for political reasons because it would be an admission of failure in the health sector on the government's end.

The Opposition leader said that while the MEPA permits state that St Philip's Hospital has 75 beds, the government is claiming the hospital will have almost 300 beds. "Does this mean that government will triple the number of beds during the three year lease agreement? Will development be carried out while patients are recovered at St Philip's Hospital?"

He added that the deal should be suspended and both sides could come to an agreement on a timetable for the approval of the deal. Muscat insisted that if there is nothing wrong with the deal then the Opposition will be on the government's side.