Three bids clear the estimate

Three consortia have submitted bids to build and run the planned Sir Temi Zammit Hospital at St Vincent de Paul, and all three are above the price the government had put on the contract.

The spread is narrow enough to notice. The lowest bid is €1.74 billion, from CareLink Medical Group, a joint venture led by Saint James Operations with CPHCL, linked to the Corinthia Group. Custodia Care, whose partners are CareMalta and CareRise, offered €1.79 billion. The highest, €1.87 billion, came from Proxima, involving Malta Healthcare Caterers and James Caterers.

The government’s estimate had been around €1.38 billion. Even the cheapest offer is therefore hundreds of millions above that figure.

That does not settle the contest. Under the tender rules, price counts for 20% of the score and technical quality for 80%. So this is not a straight race to the bottom. The state is choosing a private operator for a long arrangement: construction, furnishing, staffing and the running of wards for 27 years and six months after completion.

That matters more than the headline number. The project envisages a hospital with around 300 beds on the grounds of St Vincent de Paul, Malta’s largest state-run residential facility for older people. It is intended for patients who need medical care that cannot be provided in a residential care home but who do not require treatment at an acute hospital. The tender says the facility is also expected to help ease pressure on Mater Dei Hospital.

Government would retain responsibility for doctors and the management of the admission area, while the private operator would run the wards around the clock. The facility is set to include 12 wards with at least 24 beds each, plus an admission area with 12 cubicles.

What the bids have done, before any planning permit or construction phase, is expose the distance between the state’s estimate and the market’s response. That does not by itself prove the government got the figure wrong. It does show that three separate groups looked at the same concession and all priced it well above the official valuation.

That gap matters because the operator’s investment is to be recovered through government payments over the concession period. Over a contract that stretches across nearly three decades, the extra hundreds of millions are not a technical detail tucked inside procurement paperwork.

The process is still some way from a working hospital. The bids must be evaluated, a preferred bidder selected and the contract awarded, and the project will still need planning permission. Once the necessary permits are issued, the successful consortium will have 30 months to complete and furnish the hospital and prepare it for operation.

For now, the clearest fact is also the most awkward one for government: every bid came in above the number it had attached to the project.