Issue link: https://maltatoday.uberflip.com/i/513060
maltatoday, SUNDAY, 17 MAY 2015 12 News CONTINUED FROM PAGE 1 Malta is grappling with an ageing popula- tion that between 1985 and 2013 has seen the number of persons aged 75 years and over rise by 141 per cent from 12,221 to 29,444. To counter the demand for resi- dential care for the elderly, the State increased contractual ar- rangements with the private and the Church sectors to increase beds by 10%. But the private elderly care com- pany of construction magnate and PN donor Nazzareno Vassallo turns out that it owns the absolute majority of government-financed beds in private homes. The company, Care Malta, oper- ates 76% of the 1,118 government- financed long-term-care beds in homes for the elderly as of 2013, with a whopping 78% of all of Care Malta's beds being financed by the state. The NAO warned that Care Malta's market dominance could not only stifle competition, but en- hance owner Nazzareno Vassallo's relationship and negotiating power with the state's Department for the Elderly (DfE). The NAO analysed bed procure- ments for three homes for the eld- erly operated by Care Malta – the Zejtun Home, the Madonna tal- Mellieha Home, and the Roseville Home in Attard. Zejtun In 2002, Care Malta was awarded a 25-year contract on a direct or- der, with a Cabinet memo high- lighting that the company was the sole tenderer for the running of the home, and that "hardly any people complained about their running of the home", and how it was an established leader in the care in- dustry. The Social Policy Ministry, then under Lawrence Gonzi's steward- ship, insisted that the tendering process would have taken too long to provide those 80 beds in Malta's "most needy region", hence the di- rect order. The NAO argued that a call for tenders would have created com- petition between Care Malta and another bidder, resulting in more favourable financial conditions than the direct order. Mellieha In 2007, Care Malta was also awarded a public-private partner- ship to construct the Madonna tal- Mellieha Home following a success- ful tender bid for a home catering for 130 residents. Just four weeks after the contract was signed, the home's committee started discuss- ing a 24-bed extension, prompting the auditors to question why such an extension, that eventually cost €450,307 in refurbishment works, was not foreseen. The DfE agreed to give Care Mal- ta the 21-year extension contract on a direct order and the first resi- dents were admitted into the new extension in January 2011. However, the Contracts Depart- ment only gave their seal of ap- proval to the extension in June 2012, implying that Care Malta was allowed to carry out its works prior to mandatory approval and therefore against the terms of the public procurement regulations. Indeed, the NAO quoted the Contracts Department remarking that it was being requested to act on a "fait accompli". The contract was signed on 1 March, 2013, over two years later than the contract initiation date as indicated in the agreement, flagged by the NAO as a poor busi- ness practice. Roseville Home Following an expression of inter- est issued by the Foundation for Medical Services (FMS) in 2009, the DfE decided to procure 80 beds from Care Malta to be placed in a new residence for the elderly at the Roseville villa in Attard. 15 operators declared their in- terest, five of whom offered beds from a ready-available stock, and the other ten offering medium- to long-term projects as well as the provision of community care serv- ices. These ten were immediately ruled out, as the DfE was faced with the pressures of instant bed demand. Out of the remaining five, the DfE claimed that only Care Malta had the immediate facilities at Roseville at its disposal to offer long-term services for the elderly. Care Malta was therefore awarded a one-year contract on a direct order. However, the NAO pointed out that the DfE and the FMS had not carried out a comprehensive eval- uation report of all 15 requests to justify their eventual selection of Roseville. In its approval, the Contracts De- partment laid out three conditions enabling the DfE to proceed with a direct order – the procured serv- ices must be absolutely necessary, considered value for money, and that funds are available for such procurement. However, the NAO argued that the DfE's urgency could have been avoided through better planning, as the department was aware of the demand trends and projections. Also, the Contracts Department did not check whether the condi- tions for approval were met, in- stead placing the onus on the DfE. "The absence of formal and comprehensive evaluation reports justifying the utilisation of direct negotiation procedure clauses, as well as the ensuing procurement of 80 LTC beds at Roseville, is deemed to have digressed trans- parency, good business practices and internal control mechanisms," the NAO damningly stated. Vassallo's Care Malta dominates state-financed homes sector Daily variance between contractual agreements and caring service provided May-Sept 2013 inspection August 2013 inspection Jan-Feb 2014 inspection Mellieha home -81 hours -80 hours -81 hours Zejtun home -202 hours -178 hours -192 hours Roseville home -35 hours -40 hours -44 hours Casa Leone -36 hours -34 hours -36 hours Year 2011 1,678 448 357 2 2,485 805 726 4,016 27,255 14.7 2012 1,682 547 369 49 2,697 864 679 4,190 28,417 14.7 2013 1,644 648 390 80 2,762 801 683 4,246 29,444 14.4 2014 1,624 649 556 93 2,922 833 670 4,425 31,789 13.9 GOVERNMENT-FINANCED BEDS Government home PPPs Buying of beds from private Buying of beds from church Total government- financed beds Other: Private sector beds Other: Church beds Total beds available Malta elderly population +75 % of total beds avilable for elderly population Elderly homes: daily required caring and nursing Zejtun (2003 contract) – not specified - Zejtun (2013 addendum) 114 117 27 22.8 Mellieha (2007 contract) - not applicable - Roseville (2013 contract) 114 120 27 22.8 Caring time, minutes per resident Nursing time, minutes per resident High- dependency High- dependency Semi- dependency Semi- dependency To counter demand for residential care for the elderly, the State increased contractual arrangements with the private and Church sectors to increase beds by 10% Left to right: Zejtun home, Roseville (Balzan) and Casa Leone (St Julian's)