Prime Minister Lawrence Gonzi issued a direct tender for a year of under €2 million to Group 4 Securitas (G4S) for internal security arrangements inside Mater Dei Hospital, just two and a half months before the 8 March general election.
The contract period has now been reduced to seven months, supposedly terminating in July, by social policy minister John Dalli, who has told MaltaToday the payment was reduced to €1.08 million for seven months.
In a reply to MaltaToday, the government has said that the contract was negotiated “as a continuation of the service” that G4S had previously provided Skanska, the Swedish firm entrusted with the construction of Mater Dei.
G4S was in fact allowed to extend the previous security contract it held with Skanska, until after the 1 January 2008 handover to government, but without a public tender being issued.
One contradiction to emerge is that government is claiming the contract was signed in January 2008, while G4S managing director Kenneth Demartino said he signed the contract after he became managing director, that is after 24 February.
The government said the arrangement was until a new tender is issued after the hospital settled down following migration from St Luke’s Hospital, by request of the Foundation for Medical Services.
“This was authorised by the director of contracts in the best interest of the patients and staff to minimise disruption and risk by providing continuity through the people who knew the building and its security risks best at that point in time.”
But strangely, the contract with G4S which commenced on 1 January was only allowed to run for seven months. The contract is supposed to have terminated on 31 July 2008, because social policy minister Dalli will now be issuing a new public tender for the internal security services.
The company is however still operating at Mater Dei and no public call for tendering has been issued yet.
MaltaToday can reveal that the internal security contract cost government €154,407 a month – a total of €1.08 million. According to a reply by John Dalli in parliament, the contract is for 73 security guards in the morning, and 20 for the night-shift. G4S however says it only provides 38 security guards in the morning.
In the same parliamentary question, it was also revealed that the government is paying just €790,000 for the salaries of 46 government workers who employed as security guards at St Luke’s Hospital, with other duties inside the homes for the elderly, clinics, and Mount Carmel Hospital.
Cabinet waives concession fee
Group 4 Securitas has however managed to secure an even bigger slice of the cake at Mater Dei.
In a public tender it won for the provision of external security services, Parksec Ltd – which is owned by both Group 4 Securitas and Group 4’s managing director Kenneth Demartino – is now running the car park at Mater Dei. The contract runs for five years, and commenced in July 2007.
However, although Parksec was bound by contract to pay government an annual concessionary fee of €326,000 (Lm140,000) as payment, the concession was waived by the government after Lawrence Gonzi’s decision to halve the hospital parking fees.
The revision of the fees came in the wake of strong public protest about the high prices charged for parking within hospital grounds.
In comments to MaltaToday, the government said that it was decided by Cabinet that it was willing to forgo the concession fee to halve the tariffs and renegotiate the agreement with Parksec.
“The agreement reached not only reduced the tariffs but also included the provision of a further 350 spaces exclusively for staff, and the provision of over 50 extra spaces for the disabled and more spaces provided for long-term chronic outpatient cases that needed to park at the hospital facility at very low rates for long period of time. Also, a new lower tariff rate was introduced for long time stays,” a spokesperson said.
However – and here’s what takes the biscuit – MaltaToday is reliably informed that the government is now actually paying Parksec, rather than the other way around, for the estimated decrease in revenue from the cut in tariffs with a further compensation of Lm210,000 (€489,000) every year.
The government has ignored MaltaToday’s question on whether it was paying Parksec any compensation.
That means the government not only lost out on €1.63 million in concessionary fees for the next five years. But it will also give Parksec a total of €2.44 million while allowing it to keep all the revenue from the car park.
And that is already a big windfall for Parksec, which can collect a minimum of €1 for a stay exceeding 15 minutes (it actually takes 20 minutes to walk from the car park to a Mater Dei ward). With 983 spaces at Mater Dei, Parksec can make a cool half-million euros in revenue every year, without giving any of it back to government.
And despite such a lucrative earner, the government has confirmed that revenues are not even reported to the Foundation of Medical Services.
Higher concessionary fee
MaltaToday can even confirm that at the time of the public tender, another company, Bonnici Brothers, was offering to pay government a higher concessionary fee of Lm175,000 (€406,000) for the operation of the car park.
But despite their lower offer, Group 4 Securitas was chosen by the contracts division for the operation of the car park.
“A tender submission is made up of several components and must be considered wholly in terms of benefit and added-value. Consequently, the decision to award a contract is not solely dependent on the consideration of a single component,” a government spokesperson told MaltaToday.
“The decision to award the tender to Parksec was contested by Bonnici Brothers at the arbitration centre and the decision of the Foundation for Medical Services and the Director of Contracts was confirmed.”
When asked why the government should not man the car park using its own human resources, the spokesperson replied that it was not government’s remit to manage car parking facilities.
John Dalli’s PQ
In a parliamentary question put to him by the Labour opposition, social policy minister John Dalli told parliament that the government was paying €2.25 million every year (VAT excluded) for security at Mater Dei, without specifying how much was being paid for either the internal security or the external security (car park) contracts.
In that same PQ he specifies that government pays €790,000 in salaries for government security guards employed at St Luke’s Hospital.
More contracts to Group 4
In addition to the two security contracts, Group 4 Securitas has also won a contract for the provision of secretarial and clerical services at Mater Dei.
The company provides 88 employees to do clerical, secretarial and reception duties inside Mater Dei. A government spokesperson said the tender and award of the secretarial, clerical and reception services tender was managed by the then Ministry of Health “as it sought to address pressing urgent shortages in clerical staff during the migration process.”
The contract originally envisaged 57 private clerks and receptionists, but this was raised to 88.
The cost of the contract is estimated at €394,000 a year, or €1.9 million over five years. It is not known why health sector employees are not utilised for this job.