Issue link: https://maltatoday.uberflip.com/i/936285
maltatoday SUNDAY 4 FEBRUARY 2018 News 3 Tumuluri was always boasting of being close to then health minis- ter Konrad Mizzi and how he had long meetings with him "at Au- berge de Castille and at his home". "Ram [Tumuluri] boasted in front of me that apart from the concession to run the public hos- pitals, he also wanted to manage the private sector and this is why he was interested in Capua," Mus- cat says. This was at a time when the government tender was still being adjudicated. And while the government was saying that the public hospitals concession was going to be for 30 years, Muscat insists that Tu- muluri always spoke of a 99-year concession. "It did not make sense to have a concession for just 30 years, Ram used to tell me while boasting on the progress in talks between VGH and Konrad Mizzi. He [Tu- muluri] used to say that he knew about the situation at Mater Dei hospital more than anyone else," Muscat says. But weeks passed and procras- tination became the order of the day. Tumuluri never came for- ward with the down payment on the Saint James deal and the promise of sale agreement kept being extended. On 4 August 2015, The Malta Independent reported that Mus- cat was engaged in fresh talks with new investors for the sale of Saint James hospital. But just a month later, the Muscat family issued a press statement announcing that the sale of Capua hospital and the Saint James brand were called off. An eye-opener Muscat revisits the day when he decided to stop the sale. "I was approached by a person [he does not mention his name] who wanted to meet me. This person was close to Shaukat and Tumuluri but appears to have had second thoughts. He informed me that my advisors had been meet- ing Shaukat and Tumuluri behind my back. I was shocked but it was an eye-opener." This person also cautioned Mus- cat about Tumuluri's brush with the law in Canada. The case refers to a law suit filed in 2010 against Tumuluri's management com- pany by the owners of a Canadian hotel. Among other things, he was accused of running the hotel into insolvency. "This person also told me that VGH was negotiating a contract with the government that would see it rake in around €72 million per year from taxpayer funds," Muscat says. The figure tallies with what the VGH investors were telling banks and financial institutions as far back as February 2015 when the government's request for propos- als had not yet been published. "This equates to some €6 million per month, which the government has been paying VGH for noth- ing. Don't forget that over and above this sum, the government is paying for the wages of employ- ees at the three hospitals. This is daylight robbery and super unfair on taxpayers," Muscat says, as he questions what VGH has been do- ing with the money. One last attempt Back to 2015 and the botched sale of Capua hospital, Muscat re- counts how after pulling the plug, Tumuluri had approached him to rent out a whole floor to service cardiac patients. "We prepared a detailed propos- al for the lease of the fifth floor at Capua but Tumuluri never came back with an answer," Muscat says, in what was now a typical pattern adopted by these inves- tors. As for Shaukat Ali, Muscat says the businessman had offered to find him new investors interested in buying Saint James Capua hos- pital, a proposition that was re- jected. "With VGH taking over three State hospitals that contain hun- dreds of beds, I remain perplexed as to why Tumuluri was interested in a 60-bed hospital like Capua," Muscat reminisces. The question is likely to remain unanswered but with the major criticism directed at VGH being its lack of medical background, it is not implausible to conclude that the Saint James brand name could have given the company leverage in its search for finances and le- gitimacy. Muscat believes the government should abandon the hospitals con- cession deal and argues it is not Health Minister Chris Fearne's doing. "This was concocted by Projects Malta under Konrad Mizzi and it is unfair that fingers are pointed at Fearne. I know the Health Minis- ter on a professional basis and he is not motivated by financial gain," Muscat says. He asks the Prime Minister to in- tervene, insisting that VGH have not invested the promised €200 million but rather raked in some €140 million over the past two years with very little to show for it. "And now VGH are trying to sell the concession after just 21 months. I passionately ask the Prime Minister to stop this pro- ject because I strongly believe that we Maltese are capable of setting up and managing state-of-the-art hospitals. Nobody can understand the Maltese way of doing things better than Maltese investors," Muscat says. ksansone@mediatoday.com.mt James hospital, botched sale and middleman Muscat recalls how Tumuluri was always boasting of being close to then health minister Konrad Mizzi and how he had long meetings with him 'at Auberge de Castille and at his home' Business mind: Pakistani entrepreneur Chaudry Shaukat Ali set up Pivot Holdings in Malta back in 2010. Photos show him (top, clockwise from left) with General Pervez Musharraf, former president of Pakistan, receiving the Star of Excellence for 'meritorious contributions', and with President George Abela in 2012, where he was accompanied by shipyards owner Anthony Cassar and his son Asad Ali Shaukat 10 October 2014 The investors behind Vitals Global Healthcare sign a memorandum of understanding with Malta Enterprise for a public-private partnership in the health sector. 23 November 2014 The Vitals investors sign a memorandum of understanding between them detailing a project that involves the Gozo hospital and possibly the acquisition of St Luke's (State- owned) or St Philip's hospitals (owned by Frank Portelli). February 2015 A presentation drawn up by Vitals refers to their project as the Gozo and Malta medical complex. The presentation is used to attract finance to their project that includes St Luke's, Karin Grech and Gozo hospitals. It also indicates that government would pay a minimum yearly sum of €70 million for beds that would be used in the public health service. The presentation also speaks of a concession period spanning 99 years. 4 March 2015 News breaks that Josie Muscat is selling off Capua hospital and the Saint James brand to American and Palestinian businessmen. 18 March 2015 The government signs an agreement with Barts Medical School for the opening of a campus in Gozo. The med school will be part of the Gozo hospital to be built anew. 27 March 2015 Projects Malta under Konrad Mizzi's wing publishes a request for proposals seeking private investors to operate St Luke's, Karin Grech and the Gozo hospitals. The winning company would have to invest €200 million to refurbish the hospitals and in Gozo's case build a new general hospital. 27 June 2015 Vitalis Global Healthcare (the name of the group is subsequently changed to Vitals Global Healthcare) is chosen. from among three bidders. Mizzi says the concession will be for 30 years and Vitalis will have to invest €200 million. 2 September 2015 The Muscat family announce that the sale of Capua hospital has been called off and the facility will continue being managed by the Saint James Group. 30 November 2015 The concession agreement between the government and Vitals is signed but not published. 22 March 2016 Vitals and Malta Industrial Parks enter into a public deed for the transfer of the hospials, and Vitals are given sole discretion to extend the lease agreement for a further 69 years through a simple judicial letter. 21 December 2017 News breaks that Vitals are selling the Malta hospitals concession to American company Steward Healthcare that runs 36 hospitals in the US. Timeline