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Apologies and side-letters

Apologies and side-letters

The recent Court decision that ordered the annulment of the Vitals/Steward hospitals ‘deal’ has been the talk of the town for the last week or so.

Judge Francesco Depasquale ruled that Vitals and subsequently Steward failed to achieve their completion milestones, including plans for design, the Barts campus, beds at Karin Grech, the renovation of the Gozo hospital, and St Luke’s beds for hospital tourism. He concluded that the breach of the agreement should result in the breach of the entire concession.

Incredibly, Steward failed to submit extensive evidence that it had indeed fulfilled its obligations, only presenting a single one-page affidavit by an engineer and several pages of photos.

Judge Depasquale also warned that Steward displayed a lack of good faith when – after Adrian Delia had already filed the case – it signed a deal obliging the government to pay Steward €100 million in the eventuality that the contract is scrapped by a court order.

The judge ruled fraud was committed during three stages of the process – before the contract was signed, when it was being negotiated and when Steward took over.

The Prime Minister has shown an incredible lack of courage when reacting to the Court decision. The Government has decided not to appeal against the Court judgement and to meekly accept it. The PM has even said that in the event Steward appeals the Court verdict, he will ask for the case to be heard with urgency.

Many have called for the Prime Minister to make a public apology over the case. This is a correct and justified call. But Robert Abela has ignored this.

A public apology is certainly due but the Prime Minister is caught in a difficult situation. An apology would be interpreted as a condemnation of a deal that was made under the stewardship – pun completely incidental – of Joseph Muscat who is still very strong among the Labour grassroots. Abela must have concluded that it is too early in his political career to confront Muscat directly and has chosen the easy way out: saying he was not even an MP when the concession was granted and accepting the Court decision.

This is ridiculous. Abela is the leader of the Labour Pary and should have the courage to apologise to the Maltese people on behalf of the party that he leads. No ifs or buts, please.

There is another issue that sticks out in this sordid episode.

This is the matter of side-letters that were signed between the two parties, letters that compromise to a large extent the obligations which Vitals/Steward undertook to carry out as part of the contract.

The former Prime Minister, Joseph Muscat, has defended himself by saying that the deal was approved by his Cabinet. When I was a minister, many moons ago, Cabinet meetings were held on Mondays and I spent all Sunday afternoons and evenings reading the damn Cabinet papers that were to be discussed on Monday.

It did not take me long to realise that I was one of a very small minority who bothered to read all the Cabinet papers. Other ministers would be interested in issues that concern their portfolio and tended to ignore the rest, thus showing great faith in the Prime Minister and his ‘aide-de-camp’, Richard Cachia Caruana. To be sure, that Cabinet was never betrayed in the way Muscat’s Cabinet was betrayed on the so-called hospitals private public partnership (PPP) deal with Vitals/Steward.

That deal was also burdened with a number of side-letters that practically annulled many responsibilities of Vitals/Steward. It does not seem to me that Konrad Mizzi used to refer to Cabinet every side-letter that he intended to sign. This was very unfair on his Cabinet colleagues, albeit they must still shoulder the political responsibility for the deal.

Side-letters are used when the two sides want to keep some aspect of an agreement out of the public domain.

In my experience, the GWU often asked for some special consideration to be made in a side-letter so that that some particular concession would not upset the apple-cart where industrial relations are concerned. For example, it could be an assurance that the employer would not be taking some particular action even though he is not bound to refrain from doing so by the collective agreement.

But the side-letters signed in the case of the Vitals/Steward ‘deal’ had many types of consequences – including financial ones that burdened the Maltese state with more obligations – a situation that the Court found to be verging on fraud.

This procedure should not be allowed.

The Opposition should immediately push through Parliament an amendment to the law so that side letters are clearly illegal when they impinge on the financial obligations of one or both parties in a government contract.

This is the least demanded by the tenets of transparency.

The government’s reaction to such a move will be interesting – to say the least!

Controlling rainfaul

Controlling rainfall is nothing new. The so-called cloud seeding process involves releasing chemicals such as silver iodide, potassium iodide or calcium chloride into the atmosphere to stimulate cloud formation, enhance precipitation or suppress rain where blue skies are desired.

Few people know that China used cloud seeding to ensure dry weather for the 2008 Beijing Olympics, one of the most significant examples of the technique being used on a large scale. China has also used cloud seeding to stimulate precipitation to help replenish its shrinking Yangtze River.

Cloud seeding can theoretically go well, but there is always a chance of unintended adverse consequences. Releasing these chemicals into the atmosphere can contaminate water supplies and affect human and animal health.

Researchers at Spain’s Complutense University – a public research university located in Madrid – found in a 2016 study that silver iodide causes acute toxicity for a range of living organisms both in soil and freshwater. Another potential environmental implication of cloud seeding is its potential effect on weather patterns. Increased precipitation in one area could lead to droughts in nearby areas, as the rain is diverted away from those regions.

Given all the potential risks, governments should proceed cautiously with any plans to seed clouds. Perhaps with more research and enhancement, humans can perfect the process in the future; but in the meantime, get ready for it to become more and more common despite the risks.


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