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2 NEWS 19.10.2023 PPPs beneficial to taxpayer only when properly managed FROM PAGE 1 Experience has also shown us, however, that when PPPs are well-structured, with solid op- erational and growth plans, and well-managed, they can be very successful and become a win- win to the community and the economy, as well as private operators. Over the years, the National Audit Office has, over the years, analysed the numerous PPP contracts investigating and highlighting shortcomings, as well as identifying positive aspects. We looked at four of the main NAO reports into PPPs to see what worked and what did not. ELC landscaping contract - The first PPP which exposed many contractual pitfalls Government entered into its first public pri- vate partnership in 2002. e Environmental Landscapes Consortium (ELC) was responsi- ble for landscaping Malta's roundabouts and public gardens. is PPP lasted for 21 years, during which the government's expenditure exceeded €100 million. e main objective of the PPP was to im- prove the environment and the aesthetic ap- peal of public spaces in Malta. In fact, the ELC was instrumental in bring- ing about positive change in the landscaping of Malta's public spaces. e quality related to the maintenance of landscaped sites improved considerably over the past two decade dura- tion of the contract. However, the NAO highlighted several issues, including contractual breaches that could have led to contract termination, negotiated con- tractual rates that were not favourable to the government, a weak and understaffed moni- toring unit that resulted in "tacit consent", and the government not always reaping the full benefits in terms of sites serviced. Care Malta Group Limited Elderly Care Contract - A first attempt for elderly care home management with several challenges for government Care Malta Group Limited was awarded a PPP contract to provide comprehensive elder- ly care services, including the construction of new facilities and the refurbishment of existing ones. CareMalta was the first private company in Malta to invest in developing a privately owned, purposely built facility for the elderly, in Mosta in 1993, and then later in Rabat in 1996. It was also the first private company to close- ly partner with Government to develop Malta's first PPP in such care in Zejtun in 1994. e objective of the PPP was to address the discrepancy between the demand and supply of government-funded elderly care. is PPP relationship continued to grow and CareMalta today operates two other govern- ment-owned facilities at Cospicua (opened in December 1999) and Mellieha (opened in March 2008). With the Mellieha Home, CareMalta Group managed to win the largest ever PPP contract yet awarded with a 30-year concession period to fund, build and manage this new 'state of the art' home. e NAO report indicates that there were several issues, including the lack of competi- tiveness in the tendering process, high annual interest rates on PPP financing, and potential shortfalls in the number of carers and nurses provided by the home operators. JCL and MHC Consortium St Vincent De Paule Contract - Significant savings to government, brand new infrastructure, concerns over tender competitiveness e JCL and MHC Consortium was awarded a PPP contract for the provision of compre- hensive services at St. Vincent de Paul Resi- dence (SVPR), including catering services and the construction of a new kitchen. e main objectives were to enhance the care provided at SVPR and increase its capacity. e consortium committed to an additional €34 million investment, including the con- struction of two blocks, each block consisting of 42 rooms and 126 beds. As a result, SVPR's capacity increased by 252 beds, bringing the final tally to 504 beds. e first residents were admitted to the new blocks on 3rd July 2020. Furthermore, the consortium agreed to a 6% discount on the government's current cost of servicing each resident, resulting in significant cost savings for the government over the dura- tion of the contract. Although it began as a tender with two bid- ders, the final contract evolved into a negoti- ated procedure, which raised concerns about the transparency and competitiveness of the process, but it was eventually given the court's stamp of approval. Vitals Global Healthcare/Steward Health Care Hospitals Deal - Questionable contracts, no savings to government, and deliverables that never saw the light of day and allegations of abuse of public funds Possibly the PPP that made the most news – for all the wrong reasons – was the contract for the running of three hospitals in Malta and Gozo. Vitals Global Healthcare, later taken over by Steward Health Care, was awarded a PPP con- tract to improve healthcare services in Malta. e main objective was to improve health- care services, including the refurbishment of existing facilities and the construction of new ones. But the contract was fraught from beginning to end with issues related to the awarding of the contract, financial sustainability, risk im- balance, and lack of cooperation from key stakeholders. e contract also placed a significant finan- cial burden on Government, with the benefits clearly not outweighing the costs. ere were also issues with the lack of promised delivera- bles and skyrocketing cost to the government. Conclusion Public-Private Partnerships (PPPs) can be beneficial to the taxpayer when they are prop- erly managed and the objectives are clearly de- fined and achieved. e onus is on the govern- ment and department of contracts to monitor and stay up-to-date to ensure that taxpayer is defended at all time. The PPP Environmental Landscapes Consortium has lasted for 21 years Care Malta Group Limited was awarded a PPP contract to provide comprehensive elderly care services The JCL and MHC Consortium was awarded a PPP contract for the provision of comprehensive services at St. Vincent de Paul Residence Vitals Global Healthcare, later taken over by Steward Health Care, was awarded a PPP contract for the running of three hospitals in Malta and Gozo

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