Taxpayers fund Steward’s debts on cancer equipment

The government has been forced to top the €90 million a year already allocated to Steward Healthcare with additional funds to buy back a multi-million euro cancer treatment facility left unpaid and idle in boxes for years.

The equipment was originally ‘bought’ by Vitals Global Healthcare (VGH), which was taken over by Steward Healthcare. The purchase was made through Mtrace plc – one of the companies involved in a web of offshore companies connected to the deal that was uncovered by The Shift.

The government has now stepped in, through Malta Enterprise, to buy the majority shareholding of Mtrace Ltd.

Mtrace plc was one of the companies bought by VGH for €2 million, with taxpayer money, to ensure exclusivity of supply to the hospitals, with the aim of increasing the concessionaire’s profit margins.

Questions in parliament by PN MP Joseph Ellis about the government’s decision to take over a private company were met with a wall of silence. Minister Miriam Dalli, responsible for Malta Enterprise, confirmed the purchase but gave no further details.

Dalli only said the purchase was necessary because Steward Healthcare “was no longer interested” in providing the cancer treatment service so the government decided to intervene since the equipment was already in Malta.

The minister is refusing to say how much taxpayers had to fork out for the acquisition of 95% of Mtrace plc, or why the government did not force Steward Healthcare to honour its obligations under the still undisclosed concession agreement.

The Shift is informed that the facility originally imported by Mtrace plc in 2015, a cyclotron, was left unpacked in boxes at the Life Sciences Park, next to Mater Dei, and was never completely paid.

A company riddled with debt

Research shows that Mtrace plc, now bought by the government, is riddled with debts. Its only director is Malta Enterprise CEO Kurt Farrugia, disgraced former Prime Minister Joseph Muscat’s former spokesman put on a €180,000 a year package to head the State company.

In 2019, Intratrade Ltd – a Maltese company involved in the importation of this machine – filed a garnishee order over unpaid bills amounting to tens of thousands of euro. Requests for the payment of debts were also presented by Carmelo Caruana Ltd.

Steward Healthcare left the company penniless, to the point where the company’s telephone bill was left unpaid leading to Go plc filing a claim in court for the settlement of €403.

Malta Enterprise sources told The Shift that apart from being forced to cover the debts left accumulating by Steward Healthcare and VGH, the State company originally responsible for Foreign Direct Investment has also lost hundreds of thousands of subsidies that it had approved and passed onto VGH to purchase the same equipment.

“This means that taxpayers, who are already paying Steward Healthcare tens of millions a year for state-of-the-art facilities that never arrived, are now also making up for losses and debts accumulated by the same company,” a senior Malta Enterprise official said on condition of anonymity.

The Shift has already revealed that, through the concession agreement, VHG and Steward Healthcare have already been paid over €250 million.

No investment has been made by the concessionaire despite obligations to invest a minimum of €200 million by 2019. In the meantime, Steward has been accumulating pending debts, with a pending VAT bill of over €37 million and many other millions owed in tax and social security.

It is also battling a ruling by a UK court to pay €5 million to one of the original investors in VGH, filing documents in court stating the deal the company inherited was “fraudulent” and “corrupt”.  The evidence has now been incorporated into the case launched by PN MP Adrian Delia to have the three public hospitals returned to the public. The Opposition also filed a judicial protest following findings presented by The Shift.

What is a cyclotron?

The facility left idle for years by VGH and Steward Healthcare is used to produce a radioactive tracer for nuclear imaging during PET/CT scans. The tracer enables patients suffering from cancer to be diagnosed and monitored.

Since the Cyclotron was never put to use, the medical service continued to depend on the direct supply of this tracer from Rome.

Due to the characteristics of this radioactive tracer, which has a very short shelf-life and must be used within hours of its production, medical appointments for cancer patients have been postponed on a regular basis due to the shortage of the tracer.

When Prime Minister Robert Abela took over the reins at Castille, he had promised tough action on Steward Healthcare.  The concession was found to be irregular by the Auditor General.

Still, so far, no action has been taken to terminate the failed concession agreement and the government has increased the allocation to Steward Healthcare by an extra €40 million (increased from €20 million) for this year, over and above the €50 million it had already committed to paying.