Companies owned by former Labour parliamentary secretary Louis Buhagiar and his family made at least €34.7 million from public health contracts since 2014, an investigation carried out by The Critical Angle Project can confirm.
Buhagiar, who is a doctor by profession, owns Healthcare First Ltd together with Mikelina Buhagiar. Healthcare First is the company behind St Thomas Hospital and Good Samaritan Hospital, based in Qormi and St Paul’s Bay, respectively.
Though Healthcare First generated a significant total of €6.7 million from 11 public health contracts since 2014, the Buhagiar family’s other company, Caring First Ltd, is an even bigger recipient of public contracts in terms of total income.
Public domain data shows that Caring First generated a total of €28 million from seven contracts awarded in the same time period. It is the company behind Jasmine Nursing Home in Msida and Casa Serena in Qawra.
The contracts were all related to the provision of long-term beds for elderly patients, the outsourcing of operating theatre facilities, or isolation units for COVID patients during the pandemic.
The majority of these contracts were awarded via negotiated procedure, which are effectively a step removed from an open public tender.
“The amounts you refer to of €34.7 million are spread across four separate institutions, offering a range of services to tens of thousands of patients over the course of a decade,” Buhagiar said in response to this website’s request for a comment.
“I believe it is also important to note that we have been active in this sector since 2001, well before 2014 – the date specified in your email. It is standard practice for the Government of Malta to engage private healthcare operators and assisted living facilities to supplement national infrastructure, a practice that has been ongoing for some 20 years,” he added.
Though this investigation is not the first instance in which the government’s financial relationship with private hospitals like St Thomas was reported, it is the first time anyone provided a cumulative estimate that represents the government’s spending on this operator’s services.
Caring First is entirely owned by Louis Buhagiar’s family through North Lodge Holdings Ltd. The Gaffarena family previously owned a minority stake through Gaffarena Holdings.
“The involvement of members of the Gaffarena family was limited exclusively to one company, Caring First, which operated Casa Serena. This involvement ceased in September 2008 after a buy-out was concluded,” Buhagiar said in his reply.
“They have never had any ownership, management, or operational role in any of the other establishments mentioned.”
Buhagiar’s full response can be found below.
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Before becoming a major player in Malta’s private healthcare market, Louis Buhagiar was also an elected representative on the Labour Party’s ticket. Buhagiar served a two-year term as parliamentary secretary for the care of the elderly under Alfred Sant’s ill-fated government. He was elected to Parliament three times: in 1992, 1996, and 1998.
His family’s holdings company, North Lodge, was set up in 2001, while Buhagiar was still an MP. Caring First received its first major government contract under the Labour administration in 2015, two years after disgraced former prime minister Joseph Muscat swept to power.
In January, health minister Jo Etienne Abela announced that the government would be forking out €8 million to three private hospitals: St Thomas Hospital, St James Hospital, and Da Vinci Hospital. The stated aim of Abela’s initiative was to redirect patients who require minor interventions away from Mater Dei’s overburdened wards.
The health minister’s sudden announcement led to a major industrial dispute with the Malta Medical Association, which had ordered its members to refrain from recommending patient transfers to privately-owned facilities. The dispute was eventually resolved.
The government’s dependence on private hospitals to plug gaps in public healthcare was exacerbated by the hospitals concession fiasco. Joseph Muscat and a dozen of his former associates and colleagues are currently in court facing corruption charges over their role in a concession that was declared “fraudulent and illegal.”
The capacity crisis is being made worse by the fact that Paola’s health hub, a new mini-hospital meant to cater for over 100,000 people, remains shut three years past its deadline and has now cost millions of euros more than the original budget.
The contractor who was supposed to finish the project is also embroiled directly in the hospitals concession scandal, and a court-ordered asset freeze led to complications related to the certification of medical equipment.
In spite of the health minister’s stopgap measures, extreme pressure on Mater Dei Hospital and the rest of the state’s healthcare system remains.
The Gaffarena link
A share transfer agreement dating back to 7 May, 2001 indicates that Gaffarena’s holdings company was involved in the Buhagiar family’s business venture for about seven years before the above-mentioned buyout.
Left: Former parliamentary secretary for the care of the elderly Louis Buhagiar.
Right: property mogul Marco Gaffarena.
A screenshot of the share transfer agreement, dated back to 7 May, 2001 (three days after North Lodge Holdings was set up). Source: Malta Business Registry
The Gaffarena family name is synonymous with suspect public land deals, one of which was formally declared illegal by the courts.
Property mogul Marco Gaffarena was embroiled in what became known as the Old Mint Street scandal.
A 2015 expose published by the Times of Malta revealed that the Lands Department had paid through the nose for partial ownership of a palazzo which Gaffarena had acquired a few weeks beforehand for just a fraction of the price. The difference meant Gaffarena pocketed around €650,000 from the turnaround on the deal.
In 2021, the Appeals Court ordered the government to rescind the deal entirely. The scandal had prompted the resignation of former parliamentary secretary Michael Falzon, who was later reinstated and promoted to minister – a position he still occupies today.
More adverse media reports about Gaffarena’s conduct were published since then.
In 2023, an investigation by The Shift News showed that Gaffarena was also renting out a cramped, squalid property in Qormi, hosting up to eight beds in a crowded ground floor maisonette at a rate of €260 per bed.
Last year, Gaffarena was in court yet again over another long-standing legal saga involving his property.
The infamous Qormi restaurant known as taċ-Ċavett is owned by Marco Gaffarena and operated by his business partner and convicted drug dealer Antoine Azzopardi. In 2012, Azzopardi developed a completely illegal restaurant complete with a pool area and has been subject to an enforcement notice from the Planning Authority since then.
The restaurant continues to operate illegally to this day, in spite of the fact that the court eventually imposed a €25,000 fine as a result of the illegal development.
In his ruling, Judge Francesco Depasquale had specifically called out Gaffarena’s lawyers for their “blatant abuse of legal proceedings” to delay paying the fine for almost twelve years.
Louis Buhagiar’s full response
Author’s note: while this website does not usually carry responses from story subjects in full, we are making an exception since the subject in question went to considerable lengths to provide a detailed response prior publication. It is this website’s policy to be fair and accurate in all instances – including rare ones in which one of our subjects bothers to provide a comprehensive response.
“I can confirm my role as director of St Thomas Hospital and Good Samaritan Hospital as well as elderly assisted living homes Jasmine Nursing Home and Casa Serena.
Firstly, it is important to clarify that the involvement of members of the Gaffarena family was limited exclusively to one company, Caring First, which operated Casa Serena, and that this involvement ceased in September 2008 after a buy-out was concluded.
They have never had any ownership, management, or operational role in any of the other establishments mentioned.
All these companies have consistently delivered high-quality healthcare and assisted living services, meeting the standards and obligations set out by the relevant regulators.
All public procurement contracts awarded to companies I am associated with were secured in full compliance with applicable laws and regulations.
The amounts you refer to of €34.7 million are spread across four separate institutions, offering a range of services to tens of thousands of patients over the course of a decade.
I believe it is also important to note that we have been active in this sector since 2001, well before 2014 – the date specified in your email.
It is standard practice for the Government of Malta to engage private healthcare operators and assisted living facilities to supplement national infrastructure, a practice that has been ongoing for some 20 years.
Numerous other licensed providers of homes for the elderly operate under the same procurement framework, offering identical services.
In fact, Malta has over 30 such facilities, all of which contribute to the healthcare system in the same manner.
Furthermore, our four institutions are far from being the largest recipients of such contracts, and many other providers have secured similar or significantly larger agreements.
Additionally, our institutions have not benefited from any favourable terms that stand out from the standard procurement agreements applicable to all providers.
My concern is that singling out our institutions without acknowledging this broader context could present an incomplete picture of how these essential services are delivered to patients.
I also believe it is important to distinguish between the services provided by assisted living facilities and those offered by fully licensed hospitals.
Assisted living facilities primarily cater to residents who require varying levels of daily care and support, depending on their medical and personal needs.
In contrast, hospitals provide a far broader and more intensive range of medical services, including diagnostic imaging such as X-rays and CT scans, surgical procedures, emergency care, and specialised treatments.
The operational costs and regulatory requirements for hospitals are significantly higher due to the complexity of care provided.
Recognising this distinction is also crucial when assessing the scope and cost of healthcare services delivered by different institutions.
We believe that public-private partnerships play a crucial role in strengthening Malta’s healthcare sector, ensuring accessibility and quality of care for patients and residents.
Our focus has always been, and remains, on providing professional, ethical, and patient-centric services in line with national healthcare priorities.
In conclusion, I believe it is important to ensure that any reporting on this matter reflects the full context of how public-private healthcare partnerships function in Malta.
Focusing on our institutions, while similar agreements exist with numerous other providers, could misrepresent the broader reality of healthcare procurement and service delivery.
Also, given the complexity of this topic, I would be happy to meet in person or provide additional context before publication.
And lastly, I understand that issues can often arise when dealing with procurement data, and I appreciate your diligence in ensuring that all aspects are fully understood before finalising your article.
Should you have any specific questions or require clarifications on any aspect of your research, I remain available to provide further information.”