The MedPoint Affair: The real scandal
Political Caricatures
By L.E. Pep
The government bought a decrepit old building and its lot of old iron (Samlo was apparently not happy) at a cost of Rs 144.7 million when it was initially valued at Rs 75 million. The deal was endorsed by the Cabinet, chaired by the then PM. The Minister of Finance (MoF) did not take part in the deliberations to, as he says, avoid any perception of conflict of interest as his sister held 23,59% of shares in the company which owned the MedPoint Clinic. The minister’s cousin, Maya Hanoomanjee, was then Minister of Health. The Ministry of Finance and several government officials were allegedly forced to rush the project through before the end of the financial year to avoid the capital gains tax. It is also known that the MoF finally approved an authorization for the reallocation of funds for the purchase by the government of the Clinic at the higher valuation.
At that time, there were queries on whether the acquisition of MedPoint was really “value for money” or whether the same rigour was applied to “the MedPoint clinic-conversion-to-a geriatric hospital” project as it was being applied to other projects by following the Investment Project Process Manual (IPPM) guidelines, namely the need to carry out a feasibility study, screening by a Project Plan Committee, cost evaluation, etc.
Today we are realizing that all the rules had been flouted, and the end result is that the taxpayers, after losing some Rs 11 million on the capital gains tax legally due on the plus-value of the Clinic and overpayment of Rs 75 due to the overvaluation of the Clinic, will now have to bear the additional cost of around Rs 1 billion. The dilapidated building, stripped of all its equipment, doors and windows, will have to be pulled down for a totally new structure and new equipment. We have to add to that the cost of going to the Privy Council including the “pointless” displacement of the Director General of ICAC to London.
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IMF Team at the Ministry of Financial Services
The financial services sector is likely to go through a challenging period as we approach the April deadline for the India-Mauritius tax treaty. The negative consequences of the treaty revision will become more clearly evident as the transitional window for capital gains exemptions will be fully closed as from April this year. The sector is already experiencing some upheavals at the level of FDI equity flows to India. Between April-September 2017 and the corresponding period in 2018, the share of Mauritius FDI equity flows has fallen by two thirds, while Singapore has doubled its share.
The Minster of Financial Services, however, feels that there are “positive signs that funds domiciled in Mauritius which predominantly targeted India for investment are diversifying into Africa.” The IMF will be assessing the competitiveness of the sector, the impact of the treaty revision on the sector and the Balance of Payments and the progress of our Africa strategy. The working group comprising the UK Department for International Development (UKDFID), Mauritius-Africa Fund, the EDB and officials of concerned ministries will also be looking for further avenues of cooperation to drive forward the Africa strategy.
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The political cauldron is already heating up
It is very likely that the political party that has the higher number of young politicians and new faces in its list of candidates (more than 60%) will stand a greater chance of faring better at the forthcoming polls. The Labour party seems to have taken the lead in this sense by unleashing its young Turks. They met at the party headquarters to frame their strategy and a programme of activities for every constituency across the country. Indeed, the Labour Party’s young activists are already on the offensive.
As for the Mauves, the unofficial list of potential candidates that is being circulated seems to be creating some confusion and nervousness especially among some stalwarts who do not figure on the list and who are openly showing their discontent.
As for those parked on the side of the Sun Trust, the Kitchen Cabinet appears to have launched a counter-offensive, an updated version of the Vire Mam 2014 campaign, but this time out of desperation, by mobilizing their digital nerds for another round of messages and clips of all sorts, targeting the former PM and his “classy” lifestyle . They have to be careful not to be hoisted by their own petard, courtesy of the new provision of amended ICTA legistation — “Pa denigré mam”…
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Beneficiaries of Social Aid receiving a mere pittance
“Y aurait-il une ‘mafia anti-dimounn miser’ au gouvernment ?”
Social Aid is an income-tested scheme. It is payable to the head of a family who is incapable of earning his living adequately and who has insufficient means to support himself and his dependents. Social Aid is payable to the poorer section of the population, including the dependents of prisoners and abandoned spouses, especially those with dependent children. The allowance payable is calculated as the difference between the total income and the expected overall expenditure of the family.
As at June 2017, 18,493 in families were benefiting from such assistance. These families are not getting the Rs 400 per person as compensation for the increase in the cost of living but a mere Rs 41. A family with four kids will receive only Rs 171. If a family has only one child of less than three years or is attending school up to 23 years, the compensation is between Rs 23 to Rs 35.
One would recall the episode of one pack of biscuits and a bottle of water for the refugees and now this callous attitude towards the beneficiaries of social aid. This is why we want to ask the Chief Whip of the governing party “Y aurait-il une ‘mafia anti-dimounn miser’ au government ?”
How is it that needy families that should be fully compensated for the increase in the cost of living are getting only a pittance while better-off families are getting double the compensation amount, one on their basic retirement pension and another on their occupational pension. In this government we have a bunch of amateurs and their latest measure on free tertiary education is a solid example of such amateurism – measures announced without thoroughly analysing and assessing the cost, impact and the implementation issues.
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The Minister of Environment: ‘Pas moi li sa !!’
Rezistans ek Alternativ (ReA) is once again sounding the alarm and reporting failure of the Ministry of the Environment to protect sensitive environmental areas, including wetlands. According to the eco-socialist party, the recent floods in Cottage and Tamarin are due to a problem of lack of proper drains and some 200 wetlands that need to be restored.
“While the wetlands are also under the responsibility of the Ministry of the Environment, through the Integrated Coastline Management Zone, it seems that the Environment Minister, Etienne Sinatambou, has completely absolved himself or diluting his ministry’s responsibility for the wetlands, by involving the National Ramsar Committee in the EIA licensing process,” the party said in a statement.
Thus, now to obtain an EIA license, the main stakeholders will also have to get the approval of the National Ramsar Committee which is under the purview of the Ministry of Agro-Industry and Food Security. “The purpose of this committee is to assist the ministry in implementing the recommendations of the Ramsar Convention and to advise the ministry on the wetlands. It seems that the Minister of the Environment does not want to take responsibility for the wetlands and prefers to hide behind the National Ramsar Committee,” says ReA.
The party also requests that the Terms of Reference for the National Ramsar Committee be made explicit. In addition, in a letter addressed to the Ramsar International Secretariat and the International Union for Conservation of Nature (IUCN), ReA calls for their immediate intervention in “the various ecocides currently underway on the Mauritian coasts such as Bel-Ombre, Cap-Malheureux, Les Salines of Black River and Pointe-d’Esny.
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The Combined Cycle Gas Turbine (CCGT): Another episode
Following a series of circulars from the Ministry of Finance (MoF) with a view to imposing its authority on the public enterprises’ borrowings to finance their investment projects, the CEB is hitting back. It has come out with a clear warning that if it is not able to meet the energy demand in 2019, the Ministry of Finance will have to bear the blame. Thus the risks of black-outs seem to have come back on the agenda.
For the CEB it is a deliberate attempt by the MoF to try to block the CCGT project. The MoF has decided that the whole exercise of the evaluation of bids for the CCGT project will have to carried out again as the project has been rejected by the Independent Review Panel. The CEB considers that such a revaluation exercise will only lead to further delays for a project that should have started since last year.
In the higher political circles the view is that Government will not go ahead with this Rs 8 billion project. Some more tussles in view. Allez comprendre!
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Tertiary education: Few entrants likely
The statistics on the performance of the 15,438 candidates from Mauritius and Rodrigues who took part in the School Certificate (SC) examinations in 2018 shows a success rate of 71.51%. The Mauritius Examinations Syndicate, surprisingly, did not publish the data on the number of students with less than five credits. Thus it will be difficult to work out the number of students who are qualified to move up to HSC.
Most of the educators and managers of private colleges believe that through a rough analysis of the results of the individual subjects and the success rate by colleges, one can deduct that at least 50% of the students have not obtained a sufficient number of credits. They would not even be surprised to learn that it could even be more than half.
This will be drastic for many colleges which will have to convert to Grade 11 schools, while many of their teachers as well as their infrastructure will become redundant. And what about the students with less than four credits? Has government made some provision for absorbing these students by providing an alternative academic or a vocational stream?
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GRA: Grilled again
The gambling Regulatory Authority (GRA) has its hands full with some contentious cases, this time with the bookmakers operating off-course who are contesting, via a judicial review, the decision of the GRA to relocate them at the Champ de Mars. The bookmakers believe that this decision of the GRA is a well-orchestrated move to get rid of them while allegedly unreasonably and unfairly favouring Booksystem Ltd, Bet On Line Ltd and SMS Pariaz Ltd to their detriment. The decision to relocate them at Champ de Mars goes against the spirit and objectives of the GRA Act. By so doing, the GRA may be acting contrary to the GRA Act by propping these entities into a monopoly situation.
It is illogical for the GRA to force the eight bookmakers off the competitive market when they are realizing a turnover of Rs 28 million whereas SMS Pariaz with its multiple outlets all over the island is able to achieve a turnover of just Rs 10 million. Why would government decide to favour a single operator which will cost the Exchequer some Rs 18 million in revenue loss? Indeed, something quite fishy is going on. It is to be hoped that the GRA is not another of those institutions that are being infected with toxic polarization and unaccountability.
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Linear Accelerator defective for months: Waiting for Godot!
The Linear Accelerator (LINAC), which is “the device most commonly used for external beam radiation treatments for patients with cancer”, has been defective for months now. Patients are being sent to India for radiotherapy sessions. In a reply to a PQ in March 2018, the Minister of Health blamed the previous regime for not having made provisions to renew the then more than 20 years old equipment whereas the equipment life is 10 years. He also added: “You tell me to try to do something early. I cannot do anything early… To put a LINAC, you need a bunker... Where am I going to get a building like that at present in Mauritius? We do not have it. You have to build it. I am going to start the building in about one and a half months. It is going to take about 15 months to 18 months for the new LINAC to be operational.”
But in the case of the Medpoint Clinic, it was so easy to find an appropriate clinic for the geriatrics hospital; for work in Agalega and for the Metro express, there is a hurry to get the project completed even if it means bypassing many procedures – an EIA clearance for example. In this case, why not the same urgency to get things done?
In the final analysis, the success or failure of any government must be measured by the well-being of its citizens. Nothing can be more important to a state than the health of its citizens; other non-priority projects can wait.
* Published in print edition on 25 January 2019
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