One bidder for double the price: controversial tender for cancer treatment facility closes

Tista’ taqra dan l-artiklu bil-Malti hawn.

A controversial €24 million call for tenders for a new cancer treatment facility at the Oncology Hospital closed last week, with only one bidder whose equipment doubled the project’s price.

This news portal followed developments on the tender as it became increasingly clear it seemed to be designed to accommodate a single supplier – at a cost double the original €12 million estimate.

The Public Contracts Review Board (PCRB) was asked to revoke the tender, funded by the EU, to acquire the cancer treatment facility due to several “irregularities,” including breaches of EU rules.

The equipment costs about half the value of the tender – the increased costs are due to the need to build a bunker to host the model offered by Technoline, which submitted a bid at €21.5 million.

In the first round of the procurement process, it was clearly stated that the new machine would have to fit into an existing bunker at the oncology hospital in Msida, which had been left empty for this purpose.

An internal report, revealed by The Shift, had concluded it was fit for purpose, despite the authorities’ claims. But the equipment offered by Technoline does not fit in the existing bunker.

Technoline, officially owned by Ivan Vassallo, a former manager at the same company, was one of the companies the so-called ‘investors’ in Vitals Global Healthcare acquired to maximise profits. The Shift had revealed that VGH’s secret owners had funded the €5 million takeover of Technoline through companies in Jersey.

Eliminating the competition

Last year, the health ministry, in tandem with the management of Mater Dei and the Foundation for Medical Services, issued a preliminary market consultation to assess potential suppliers of the cancer treatment facility to be funded by the EU through its recovery fund.

An investigation by The Shift revealed that at the end of that process, in December 2021, government officials realised that the empty bunker earmarked for this new machine would not fit the one offered by Technoline. At the same time, two other bidders insisted that they had no problem supplying equipment that would fit in the existing bunker.

The government changed the contract’s terms, conveniently taking up a suggestion by Technoline to build a new multi-million-euro bunker for the new equipment. This change meant the project’s costs increased, from €12 to €24 million.

The Public Contracts Review Board (PCRB) decided in favour of the health ministry, allowing it to issue the €24 million tender for the purchase of an MR LINAC cancer treatment machine despite the objections of a prospective supplier, Charles De Giorgio Ltd, saying the tender was designed for one specific company.

Technoline is now the only supplier bidding for the contract.

The Technoline story

In January 2019, The Shift revealed how the owners of Vitals Global Healthcare – the company which was given a scandalous 30-year concession to manage three public hospitals, had funded €5 million to take over Technoline through companies in Jersey. It remains unclear whether these funds were coming from the payments – some €55 million a year at the time – the government was passing to VGH as part of this concession.

The individual now fronting the company was its sales and marketing manager, Ivan Vassallo, who ostensibly ‘acquired’ Technoline through his company Gateway Solutions Ltd.

Some three months after Vassallo took control of Technoline, VGH entrusted this company with procuring all of its medical supplies. This means that when VGH granted Technoline exclusivity of supply, the hidden owners behind VGH were awarding the lucrative deal to themselves, guaranteeing a steady stream of revenue, potentially even after they were out of the picture.

Vassallo has consistently refused to explain to The Shift how he managed to buy his previous employers out, saying that this was “a private deal” and “nobody’s business”. He has also avoided questions on why a relative of Shaukat Ali Abdul Ghafoor (a hidden beneficial owner in the VGH deal in Malta and abroad) was appointed director of Technoline later in 2017.