Steward’s turn of the screw

Robert Abela insistently asks voters: “Who do you want to run the economy? Who do you want to run healthcare?” Well, yesterday’s revelations by The Shift help us answer that.

Coming soon to a theatre near you, thanks to the same politicians who managed to get us greylisted, is the prospect of all being bared in court that has to do with the Vitals Global Healthcare (VGH) deal – the secretive 30-year concession of three of Malta’s hospitals, worth €200,000 per day and €2.1 billion total.

All veils are coming off – from the concession itself to all the side letters. Almost 500 pages. The documents have already been filed in court and witnesses summoned. They include Abela, Chris Fearne, Joseph Muscat, Konrad Mizzi and Keith Schembri. The sitting is scheduled for 15 February.

Who’s threatening to do all the revealing? Why, Steward Health Care, which took over, in unusual circumstances, from the hidden investors of VGH in 2017.

Remember, the concession agreement still has not been fully revealed in parliament, on the grounds that it contains commercially sensitive information.

Steward has no problem revealing anything. It is already claiming, in court, that the deal itself is mired in fraud and corruption.

That’s nothing new for us. The National Audit Office (NAO) reported last year that the original deal was vitiated and probably illegal. But it’s an interesting turn when the deal’s current beneficiary blares it out in court.

There are currently five legal proceedings – involving present and former investors and the concession’s former head of legal affairs – that threaten to reveal previously hidden aspects of the deal and operations. The most serious is the case that Steward is involved in.

The case is an appeal against the €5 million awarded to a former original investor who claimed to have been cheated. Steward’s case: he isn’t owed anything on a deal that was itself corrupt.

Why should Steward expose itself this way? Doesn’t it risk losing its own hold on the deal? Not in practice.

It already knows that the government is reluctant to rescind the deal. The government has done nothing about the NAO report. It has even added €20 million to Steward’s coffers in this year’s budget – purportedly as “investment in health”. But the loot goes straight to Steward, under the terms of the concession, with no strict obligation to spend it on us.

The law does permit Steward’s competitors to challenge the deal. But since the deal itself is now so fraught – legally, politically, financially – who would want to take over such a deal?

So Steward is undertaking a calculated gamble. It wants more money and has already wrung significant concessions. In August 2019, Mizzi signed off on a deal that awards Steward €100 million if it ever walks away, irrespective of the circumstances. Under the current terms, between 2017 and 2022, Steward will have doubled the bulk of its annual income.

But it still wants more, despite hardly delivering on its major obligations. Abela could rescind the agreement. But he hasn’t and now Steward is turning the screw.

With a general election approaching, one of Labour’s battle cries is that it can be trusted with health. Steward is using the information it has on the deal as leverage. The first court sitting, scheduled for last month, was put off at Steward’s request. Clearly, the aim is to reach a settlement before the case begins.

Back in March last year, Abela told a Labour audience that scrapping the deal would be “easy and populist”, especially for him: “It would have been easy for me to say that I wasn’t involved in this deal and that I will scrap it.”

Not so easy, apparently. Back then he said his government had a “clear vision” on how to address the issue. “We analysed the contracts and found a lot of good but there were also aspects that did not satisfy me.”

It emerged that Steward owed €12 million in unpaid taxes and social security. Abela insisted that Steward would have to meet its obligations. “This is how a government that holds the national interest as its top priority must operate.”

Instead, we now see the government answers no questions about the deal. An additional €20 million thrown at Steward — even though the plans to upgrade St Luke’s and the Gozo General Hospital have seen no progress. They’re years behind schedule.

This case goes beyond grand corruption. Abela now owns this deal. Same goes for Fearne. Having called Steward’s takeover from VGH “the real deal”, he’s now insisting that the €20 million are an “investment” in health.

The case is therefore now about whether Labour can clean up the major corruption of the Muscat years without bringing itself down.

It’s a test of whether it can put the national interest first – not least the interests of today’s youth, whose future taxes will have to pay for a 30-year concession whose owners have no compunction about defaulting on their obligations while holding out for more money. (Oh, did I mention the additional 69 years granted of use of public land?)

If Abela gives in to Steward, we’ll know whom we can’t trust with health.

Read The Shift’s investigation here.