Issue link: https://maltatoday.uberflip.com/i/919364
maltatoday SUNDAY 24 DECEMBER 2017 News 17 ing the same amount you always have," he says, insisting that farm- ers must think ahead with the changing industry. "But this is no excuse for break- ing the law," Scerri says, express- ing little to no sympathy for farm- ers who refuse to 'grow'. "If you don't grow, you'll die – and that's business." Scerri welcomes stricter controls on farmers, whom he says will not all agree with such controls. "Enforcement results in more confidence and trust among con- sumers, which would benefit us. A solution to the challenges of farm- ing would have to involve farmers themselves, and look at how the situation can be improved from all sides." Young farmers and the future The FOE report also quoted stakeholders who said that they think farming will become nothing more than a hobby if drastic action is not taken, since the number of farmers is decreasing and young farmers are facing challenges. "There were many more farm- ers before, but today farmers have more work," Scerri says, speaking from his own experience now that he is growing more livestock than his father did. "This is not a negative change, as each farmer is having a bigger share of the product." However, when it comes to agri- cultural farming, he says, the issue of land is the most pertinent. "Unless the land is inherited, it is complicated and costly for a young farmer to come into pos- session of it. I think today it is impossible to start a farm from scratch, due to the laws, permits, cost of land, and cost of invest- ments," he says, adding that it takes a long time for farmers to start seeing profit with land prices, seeing a plot of 1 tumolo (1,124 sq.m or 0.1 hectare) cost- ing some €20,000-€40,000 when a much larger plot of land would be necessary to turn a profit. According to the report, farming is a rapidly aging profession, with the average age of farmers being 55. "When the economy is doing well, this could affect agriculture negatively, as certain sectors be- come more profitable, pushing young people to seek jobs other than farming. Farming, on the other hand, is highly volatile and at the mercy of the climate. Cli- mate change is affecting farmers on alarming levels. Dry years are a terrifying prospect and a bigger threat than competition," Scerri says. Surely enough, when he was just starting out people would tell Scerri not to continue in his fa- ther's footsteps. "I could have lis- tened to them, but I didn't." Scerri is hopeful. "Although we are small in number, young farm- ers currently working in the indus- try have the potential to dominate it and make sure local farming doesn't, in fact, become a hobby. It could be that people are not aware of the up and coming farmers and their capabilities. "It's to be expected that the num- ber of farmers decreases in the modern day, with the economy the way it is. There are opportunities, and although there are external challenges, the drive has to come from the individual." Private Public Partnerships, the stocking fillers PPP stands for lotsa profits MATTHEW VELLA THE surprise of this Christmas must surely be the sale of the Vi- tals Global Healthcare, an out- fit created by the private equity group Oxley Capital of Singapore, to take over three Maltese state hospitals and turn them into a for- profit healthcare system. Vitals has now sold its 30-year concession to an American equity group, Cerberus Capital Manage- ment, to pass on the state hospi- tal concession to healthcare giant Steward Health Care. Where to start on this equity flip whose price is yet unknown? Was the Labour government aware that Vitals would sell off its repackaged hospital system to Steward? Is the offshore company set-up Oxley uses to hold Vitals a convenient way to hide the flow of money in a deal that was, admittedly, not very transparent at the start? Will Steward demand cash from the government for the beds it gives back to Maltese taxpayers? Should we be concerned about how Stew- ard carries out its own business in the USA? The Nationalist Party, not entire- ly quick in its reaction to the sale of Vitals, wants answers to some im- portant questions: did Vitals sell off before the coming into force of European anti-money laundering rules on beneficial owners? How much has Vitals pocketed in cash from the State? Will government publish the full contract without blacked out lines? We know that the concession agreements with Vitals Global Healthcare to run the Gozo and Karen Grech hospitals will cost taxpayers more than €40 million next year. According to the finan- cial estimates for Budget 2018, the government will be paying the private company €28.2 million for the running of the Gozo general hospital, an increase of almost €16 million on the amount expected to be forked out by the end of this year for the Gozo hospital conces- sion. The concession agreement for the Karen Grech rehabilitation centre is expected to cost taxpay- ers €12 million next year, an in- crease of €8 million on what gov- ernment will fork out in 2017. The concession agreement will see the government buying beds and services from Vitals. But with the new owners taking over the concession, this leaves the National Audit Office unsure whether to probe the latest devel- opment. The NAO was tasked to audit the concession by the Op- position, but that audit has not started yet and is still in the queue. Health Minister Chris Fearne has said he is unaware of the amount of the sale. Fearne insisted that the government's interest was to ensure that all conditions of the original concession granted to Vi- tals would be respected by the new owners. He said Vitals were within their right to sell as long as govern- ment approved the decision. "We gave our consent because Steward Healthcare have a track record in the medical field," Fearne said. What was particular to the Vi- tals deal was that the project was always intended for a private eq- uity flip: getting a good deal from the Maltese government and get- ting the project ready to be resold to the highest bidder, in this case Steward Health Care of the USA. No wonder that Vitals's CEO Armin Ernst was actually still chief administrative officer at Steward, going by his LinkedIn profile. Vitals was ultimately owned by a British Virgin Islands company called Bluestone Special Situations 4, one of several of Oxley Capital subsidiaries conveniently set up in a tax haven, used for its real es- tate and specialist funds for high net worth individuals. The man fronting Vitals in Malta was Ram Tumuluri, but the person least re- ported about is the Pakistani busi- nessman Shaukat Ali Chaudry. In 2016, the two men were seeking €50 million in equity for a renew- able energy project from a Norwe- gian firm, for a 24% stake. They told the firm's CEO that Vitals was being valued at €2.8 billion. Shaukat Ali Chaudry, a Sliema resident, is connected to Vitals through its main shareholder, the BVI company Bluestone Special Situations 4 (BSS4). BSS4's subsidiary is Bluestone In- vestments Malta, with Mark Paw- ley as a director, and that company owns a subsidiary called Crossrange Holdings. This company is also partly owned (30%) by Shaukat Ali Chaudry's own Malta company, Pivot Holdings. Crossrange then owns the companies Gozo Interna- tional Medicare and Gozo Global Healthcare. These companies may have never actually traded, going by the dearth of records at the MFSA. The new boss, Steward Health Care, is the largest private hospital operator in the US. The company was established after the sale of Boston's Caritas Christi, a non- profit Catholic health service, to private equity firm Cerberus Capi- tal Management in 2010. Cerberus turned it into a for-profit compa- ny and renamed it Steward Health Care, and merged it with Iasis Healthcare in a $2 billion deal to take control of a total 36 hospitals across 10 states, with revenues of nearly $8 billion. Unleash the dogs of capitalism: Vitals was sold off to Steward, which is owned by Cerberus Capital Management, which takes its name from the mythical three-headed 'hound of Hades' that guards the gates of Hell