Issue link: https://maltatoday.uberflip.com/i/1539534
THE investigation by the National Audit Office into the 2019 deal to waive conditions on public land ac- quired by the Fortina Group is the latest in a string of scandals from the Joseph Muscat era. The probe uncovered the nefarious actions taken by high officials at the Lands Authority, which allowed Fortina to save up to €16 million in compensation owed for the waivers. The company paid €8.1 million to have all condi- tions on all parcels of land it had acquired from the government in previous years lifted. This valuation was based on an initial valuation by architects, which was vitiated because the former CEO Carlo Mifsud had tasked them to calculate com- pensation due for only one parcel of land rather than all four requested by Fortina. A second valuation exercise carried out by a reputa- ble audit firm commissioned by the Lands Authority had calculated compensation due at a maximum of €23.9 million. The NAO investigation revealed that this valuation report was, however, suppressed by the authority's chair, the now deceased former judge Li- no Farrugia Sacco. But the deceit did not stop at the authority's doors. The NAO revealed that Keith Schembri, the former chief of staff at the Office of the Prime Minister, had known about the second valuation and was involved in the efforts to keep it concealed. Indeed, the audit firm was asked to redirect its invoice to be paid for its work to the Office of the Prime Minister rather than the Lands Authority to further conceal its work. The NAO investigation revealed how Farrugia Sacco lied to fellow board members at the authority when he told them the valuation exercise was still pending when he had already received the report. The end result of this exercise was that taxpayers were defrauded millions of euros in a deal that gave the Fortina Group a generous discount for the re- moval of conditions that allowed it to develop a mix- used, high-rise complex in Sliema. Who stood to benefit from the discount? Were pub- lic officials on the take? Did the discount indirectly benefit the Labour Party through generous dona- tions? Were individuals blackmailed in the process? Did anyone illegally enrich themselves at the expense of public coffers? Only a thorough criminal investigation can answer these questions. We only hope that such an investi- gation is not starting now after the NAO report but would have started yesteryear when doubts were raised about this specific deal and more important- ly when Keith Schembri's shady involvement in the workings of government became more apparent in the aftermath of Daphne Caruana Galizia's murder. It is shameful that yet another deal entered into by the Muscat administration has been tainted with what appears to be criminal behaviour by public offi- cials with the blessing of Castille's top dog. But it is not enough for the current Labour admin- istration to wash its hands of this dirt because a key figure is now dead—Farrugia Sacco passed away in 2021—and Schembri is no longer a part of govern- ment. The rot was too deep, too wide, to be dismissed so easily. Indeed, the prime minister's latest actions of welcoming back into the Labour Party's fold dubious characters with heavy grey clouds hanging over them do not bode well. On a national level, the government must follow through with the commitment Deputy Prime Minis- ter Ian Borg made of ensuring that "every cent" owed from the Fortina deal will be recovered. The deal must be re-examined and if need be, re- scinded or changed to reflect the true value of the conditions that were removed from the original con- tracts governing the land Fortina had bought many decades earlier. It would be a big mistake if the prime minister, his administration and indeed the Labour Party are smug about the NAO investigation. Government's first re- action was to say that changes it carried out last year had addressed the shortcomings identified by the NAO. It was a pathetic reaction followed by equally pathetic reactions in parliament by government MPs. The least we expected from government in the circumstances was an expression of remorse ac- companied by outrage at the deceit, the lies, the vi- tiated process, flagged by the NAO. Unfortunately, we heard nothing of that, which makes us question whether the Labour government is truly interested in ensuring that justice prevails. Another deal, another scandal but where is Labour's outrage, remorse? maltatoday MaltaToday, MediaToday Co. Ltd, Vjal ir-Rihan, San Gwann SGN 9016 MANAGING EDITOR: SAVIOUR BALZAN EXECUTIVE EDITOR: KURT SANSONE EDITOR: PAUL COCKS Tel: (356) 21 382741-3, 21 382745-6 Website: www.maltatoday.com.mt E-mail: dailynews@mediatoday.com.mt from medicines? 11 maltatoday | WEDNESDAY • 17 SEPTEMBER 2025 EDITORIAL It would be a big mistake if the prime minister, his administration and indeed the Labour Party are smug about the NAO investigation. porters. So, theoretically, this situation ought to lead to a 'price war' that bene- fits consumers while making originator medicines more affordable. Unfortu- nately, there is only a 'profit war' where the real winner is not the patient but the pharmacy owner. Savings to patients can be direct or indirect. Let us say a direct importer prices a product at €15.20. The paral- lel importer would mark the product at €12.20, hence the patient saves €3. This mechanism is, however, not happening. The parallel importer maintains the same retail price of €15.20 but delivers the product to the pharmacy owner at a contracted price of, say, €6.20. Hence, there is no 'price war' but excessive profiteering. Sometimes, the parallel importer brings to the market a larger pack of the medicine than that marketed by the direct import originator. If one must calculate the direct savings from the larger pack, it would be in the region of 4-5%. For instance, a product cost- ing €12 would save the patient around 60c if purchased instead of a smaller pack. However, the parallel trader sells the product to the pharmacy owner at, say, €5.70. Again, a 'profit war' for the pharmacy owner. A case in point is that the parallel traders have such marketing strength that they can eliminate a spe- cific size of the product for a larger one. This situation can result in unnecessary use of the product by the patient. A case in point is that one can only buy a cer- tain antibiotic cream in a large size. The overuse of this product can lead to the emergence of resistant microbes, and ultimately, future generations may no longer benefit from it. Another way patients can save money is through indirect savings. This occurs when the direct importer reduces the price of the original medicine to provide a more affordable option. However, this mechanism is currently not happening. Instead, the direct importer is charging a higher price to offer better deals to pharmacy owners to compete with the parallel traders' offers. The confluence of Malta's high-priced, import-dependent market and a reg- ulatory framework that lacks explic- it restrictions on corporate pharmacy ownership provides the ideal conditions for ethical issues to manifest in parallel trading. While this latter trading is de- signed as a pro-consumer tool to lower prices of originator drugs and increase competition, in Malta, this tool is used to maximise the profits of pharmacy owners. Parallel trading is not creating a 'price war' but a 'profit war' that makes orig- inator drugs less affordable, compro- mising patient care, eroding trust, and limiting patients' choices.