Updated | Doubts on St Philip’s deal as Labour turns down PAC meeting

The director of St Philip's Hospital had accepted to rescind the contract for the lease of his hospital to the government, if a new Labour government is elected and there was no agreement on the hospital lease, the finance ministry has told MaltaToday.

A ministry spokesperson said that Frank Portelli had "accepted the conditions from the Attorney General after the government informed him it was ready to proceed with the agreement, only if there was an agreement reached inside the public accounts committee, even after Portelli's declaration that he would rescind on the contract should there be a change in government... it was in this light that the ministry contacted [PAC chairman] Charles Mangion, who on his part said that it was not opportune to convene the committee at this stage of the legislature."

St Philip's Hospital director Frank Portelli today said he is considering taking steps for court litigation, if the lease-and-sale deal with the health and finance ministries falls through.

The deal between Portelli's Golden Shepherd Group and the government appears to have stalled, since a copy of the final contract must first be presented to the parliamentary public accounts committee - which session appears unlikely since parliament is dissolved on Monday, 7 January.

Portelli has suggested that the Opposition, which chairs the PAC, may be holding up the committee meeting to seal the deal.

"If the Opposition doesn't want the deal, then it must speak up and declare that it is against the rental of St Philip's Hospital and the people can judge," he said.

Portelli argued that if the Opposition was against this deal "then it can only be for political reasons and at the patient's expense".

Labour had criticised the €12 million deal to have St Philip's used as a facility for Mater Dei Hospital's rehabilitation demands, due to overcrowding problems.

"St Philip's Hospital would alleviate the burden from Mater Dei Hospital: it would help address the issue of waiting lists, and provide rehabilitation facilities," Portelli told MaltaToday.

The Golden Shepherd Group had already reached an agreement with the government back in August 2011, with a second agreement reached in October 2012 to convert the sale of the hospital into a lease agreement, with an option to buy the hospital.

While Portelli has suggested that the Opposition is holding up the crucial PAC meeting to approve the deal, PAC chairman and Labour MP Charles Mangion confirmed that an informal request for the committee to convene was made last Friday by the government.

"Last Friday government said it was ready to meet and present the deal. However, this was too late in the day given the fact that next Monday parliament is dissolved," Mangion told MaltaToday.

Mangion argued that such an important issue could not be condensed into a sitting or two. "There is a lot which needs to be discussed. Government had two months to get back to us but left it at the last minute," he said, adding that government had initially promised a reply within two weeks.

Portelli has argued that negotiations between both sides was done by the book.

"Two audit companies were appointed to ensure that the deal was fair - PWC from the government's side and KPMG from our side - and the issue was discussed in Parliament," he said.

Portelli is now considering filing for compensation for damages if the deal falls through.

"If government doesn't honour its commitment, then there will be cause for damages. We feel that the deal should have gone through as agreed. Indeed government itself stated that it had the executive power to sign the agreement, but later decided to change its position. Besides the discussion in Parliament, it also decided to refer the issue to the Parliamentary Accounts Committee.

"The Golden Shepherd Group did not object to either as we are completely above board," Portelli said, adding that everything was documented in writing. "If the PAC committee does not meet then one should ask why."

The hospital deal was also famously opposed by Nationalist MP Franco Debono and independent MP Jeffrey Pullicino Orlando.