Health Ministry terminates Paola health hub contract after contractor misses multiple deadlines

The Vincent Moran regional health hub in Paola is ready, but corruption-hit Technoline has so far failed to deliver the medical equipment

By: maltatoday.com

Sep 06 2024
0
3243 Views

Health Ministry terminates Pa

The Health Ministry has issued a termination notice to the contractor responsible for the Regional Hub project in Paola.

“This decision was made after a period of evaluation, during which the Ministry, together with the Foundation for Medical Services, explored all possible avenues to avoid this outcome and, above all, the delays in completing the works,” it said in a statement on Friday.

The Vincent Moran regional health hub in Paola is ready, but corruption-hit Technoline has so far failed to deliver the medical equipment. Photos showing several clinical rooms, corridors and waiting areas suggest that works on the regional health hub are completed.

However, despite having fully functional electrical and water connections, the building seems to lack the medical equipment, which was supposed to have been supplied by Technoline.

The regional health centre, named after Vincent Moran, the Paola-born doctor who served as health minister in past Labour administrations, cannot yet open its doors to the public, despite being scheduled to open in 2021.

Audit firm Grant Thornton had been tasked with analysing the repercussions of terminating the contract.

“Unfortunately, despite the best efforts and repeated attempts, the contractor has repeatedly failed to meet critical deadlines, resulting in further delays to the project. Consequently, the Foundation for Medical Services has issued several penalties in accordance with the terms of the contract and legal requirements. The Ministry has been involved in judicial proceedings against the contractor, which have now reached their final stage,” the ministry said on Friday.

After exhausting all other options, it was determined that terminating the contract is the only viable solution to ensure the Regional Hub is completed and delivered to the public as soon as possible. “Our top priority remains the health of our patients, and we are committed to delivering this crucial facility without further delays.”

“The Ministry emphasises that the contractor has always been paid what is due according to the contract, but we also have an obligation to ensure that public funds are used in the best interest of the people,” it said. “Therefore, the Foundation for Medical Services is already taking steps to ensure the final works are completed as soon as possible and to expedite the project's completion. We will continue to work tirelessly to ensure the facility becomes operational at the earliest opportunity, so it can start serving the community and improving our healthcare services.”

Technoline under criminal spotlight

Technoline is one of the companies under the spotlight in the criminal cases instituted against several individuals and firms involved in the Vitals hospitals contract. The firm and its owners have been hit by a court-imposed freezing order.

The magisterial inquiry into the hospitals deal flagged Technoline as one of the vehicles by which former minister Konrad Mizzi, ex-OPM chief of staff Keith Schembri and their business associates, sought to acquire kickbacks from the Vitals deal.

Indeed, Technoline had been acquired by one of its employees – Ivan Vassallo – using a private loan supplied by Vitals from funds passed on by the government as part of the hospitals deal.

However, the magisterial inquiry also cast a spotlight on how Vassallo, Schembri, Mizzi and others also sought to take kickbacks from the Paola health centre tender.

The tender was mired in controversy after it was originally awarded to SP BB International JV, a consortium that included Ray Vella & Co Ltd, Pantalesco and Shapoorji.

But three firms, including Ergon-Technoline JV, objected to the tender and argued that their exclusion from the tender was illegal. They pointed out that the selected bidder put forward an offer that was €3.6 million higher than the cheapest one.

The contract was eventually revoked and given to Ergon-Technoline JV. It is understood that Technoline was responsible for supplying the medical equipment.

The magisterial inquiry uncovered how Ivan Vassallo had drafted an agreement whereby Eurybates – a company that would benefit Schembri, Mizzi, Vassallo, Pierre Sladden and Adrian Hillman – would help Ergon in submitting a tender to design and build the Paola Primary Healthcare Regional Hub.

A Greek consortium, Salfo-Ado JV, also entered into an agreement with Eurybates to provide business information services. This consortium went on to win a tender for project management and technical supervisory services for the Paola regional healthcare hub.

No money was identified to have flown into Eurybates, but a parallel company called Encore Trading Ltd – under the control of Ivan Vassallo and Pierre Sladden as associates of Keith Schembri – received almost €100,000 in October 2019. Investigators suspect these payments were a kickback for the Paola Regional Hub tender.