UPDATED: Gozo General/St Luke’s Hospital tender: it’s another fixed deal

On 20 March, I posted the news that the government had already reached agreement with an investor for Gozo General Hospital (and also St Luke’s, though I hadn’t mentioned it in the post as we were talking about Gozo) and that in the subsequent call for expressions of interest/tender offers, other offering companies would merely be used as stalking-horses.

That means cover for the government in its intention to give the project to Oxley Capital, with which it has struck a deal already, while at the same time being seen to be going through the motions of a public call. This is exactly what happened with the gas-fired power station.

I had at the time received information that representatives of Oxley Capital had been in Malta two months earlier to hold meetings at PriceWaterhouseCoopers, during which they made it clear to third parties that they already had an agreement with the government on Gozo General Hospital and St Luke’s.

After receiving this information, I messaged the prime minister’s chief of communications, Kurt Farrugia, and asked him point blank whether the very reliable information I had, that the government had reached agreement already on the matter of Gozo General Hospital and St Luke’s, with Oxley Capital, is correct.

Farrugia, who has so far always replied to my messages promptly, even if only to say that he will give me an answer later when he has checked, did not respond at all, in any fashion. I obviously took this to mean that my information was accurate and that Farrugia couldn’t very well say so, so took the only possible route open of ignoring my question completely.

Then last week Konrad Mizzi announced that the government had received “three offers” in response to its call for expressions of interest in the running of Gozo General Hospital and St Luke’s.

The offers were opened in public but the names of the bidders were not released until the press insisted. Then we were told that they are “Vitalis Global Healthcare/Bluestone, Image Hospitals and BSP Investments Ltd”.

The call for expressions of interest bypassed the Finance Ministry’s Privatisation Unit and was made directly by a limited liability company set up by the incoming Labour government and called Projects Malta Ltd, with government corporation shareholding. The directors are Alfred Camilleri of Mosta, Adrian Said of Madliena, William Wait of Fgura and Aron Mifsud Bonnici, who is legal counsel to the General Workers Union.

UPDATE: William Wait is executive chairman of the Water Services Corporation and deputy chairman of Malta Enterprise, both appointments made after March 2013.

It was Aron Mifsud Bonnici who opened the tender offers in public and refused to give the names until challenged.

A background check on the four companies (two submitted a joint offer) makes it blindingly obvious that Image Hospitals and BSP Investments Ltd are the unwitting stalking-horses for the already-decided ‘winner’, a joint offer by Vitalis Global Healthcare and Bluestone Investments Ltd.

These two companies have the same two directors, Mark Edward Pawley and Sri Ram Tumuluri, and Vitalis Global Healthcare is actually 100% owned by Bluestone Investments Ltd.

Mark Edward Pawley is CEO of Oxley Group (see screenshot uploaded here) and Sri Ram Tumuluri is the man who was in Malta last January at those meetings at PriceWaterhouseCoopers, and he was there to represent Oxley Group, and said that it is Oxley which has an agreement with the Malta government.

This is such a transparent stitch-up that you almost have to laugh at the corrupt cynicism of a government which is probably taking advice from its consultant John Dalli on how to manage done deals when in government, cover up your corruption and probably also take a cut.

He might not be directly involved, but this way of doing things has his fingerprints all over it, and is just his style.

Of course, it would not have been so very obvious had I not reported two months ago that Oxley Capital already had the deal in its pocket. The name ‘Oxley Capital’ seemed to have come out of nowhere, it didn’t ring bells for anyone, and so the story was ignored and dropped off the radar immediately.

But even without that report, it should be obvious that the other two bidders are just stalking-horses to give the government a serviceable three bids with which to cover itself.

BSP Investments Ltd is a 100% Maltese-owned company, incorporated in Malta in 1988, and a smallish operation whose directors (and ultimate shareholders) are two Maltese men, John Papagiorcopoulo and Christopher Baldacchino.

Image Hospitals is not registered in Malta, and a search on the internet reveals nothing but an operation called Image Hospitals in Hyderabad, India, a clinic-cum-private hospital which forms part of a group of businesses called Image Group, that includes everything from budget hotels to website development.