Steward Health Care owes the Maltese government €37 million in unpaid VAT

The company managing three of Malta’s public hospitals through a concession worth €2.1 billion owes the government a staggering €37 million in unpaid VAT dues, The Shift can reveal.

Through a judicial letter filed by the Tax Commissioner earlier this month, Steward Health Care was given two days to pay €36,534,160 in outstanding VAT owed to the State’s coffers, which have been accumulating over several years.

The judicial action by the Inland Revenue Department warned Steward Health Care that it will have no other option but to start formal legal action against the company if it persists in not paying up its taxes.

Sources told The Shift that despite this warning, the company has still not settled its bills, with the next stage necessitating the government to start a formal suit to receive its dues.

Steward Health Care also has millions in outstanding payments, in addition, particularly those related to social security contributions.

Meanwhile, by the end of last year, the government had paid the concessionaire over €230 million from state coffers.  And in the last Budget, the government increased the allocation to Steward Health Care by another €40 million (increased from €20 million) for this year, over and above the €50 million it had already committed to paying the concessionaire.

Abela fails to keep to his promises

Stewards took over the lucrative €2 billion hospitals concession, declared in court as “vitiated” in 2018 through the government’s written consent.

Although the original contract with Vitals Global Healthcare, an unknown company in the medical field, was already in default in 2018 when the concessionaire did not honour its commitments to invest in state-of-the-art healthcare facilities despite the millions pumped through government coffers, Health Minister Chris Fearne still gave his permission for Steward to take over the concession, dubbing it “the real deal”.

While this concession was allowed to change hands, Steward Health Care never came up with the €200 million investment they were obliged to invest during the first four years of the concession, while the deadlines for new facilities were completely missed.

Steward Health Care was obliged to build a new hospital in Gozo and refurbish both St Luke’s and Karen Grech in Malta by the end of 2018. None of this ‘investment’ has ever even started and the company has not presented its development plans to the Planning Authority.

While the shady concession was the brainchild of former disgraced Prime Minister Joseph Muscat and his closest aides Keith Schembri and Konrad Mizzi, Prime Minister Robert Abela has repeatedly promised that he would take action to make sure that Steward Health Care adheres to the concession or the agreement would be cancelled.

Despite public declarations by the prime minister that he was “studying” the deal and “discussing” with Steward Health Care, nothing has been done except for the government increasing the allocation of public funds to the concessionaire.

This tops other arrangements the government made with Steward Health Care behind the public’s back, including waivers in the form of delaying tax payments and a €100 million cancellation payment which the government is obliged to pay if the contract is terminated.