After 2 years of ‘ongoing negotiations’, government drops threats of ending hospitals deal

The health ministry has ignored questions on the outcome of government claims that it was considering terminating the contract with Steward Healthcare after the government admitted in parliament last week that there are no ongoing discussions with the concessionaire managing three of Malta’s public hospitals in a highly controversial deal.

Fearne, along with Prime Minister Robert Abela and Finance Minister Clyde Caruana, spent the last two years repeatedly telling the press that the hospitals’ concession taken over by Steward Healthcare could either be amended, kept as is, or terminated altogether.

Now that the government has voted in favour of a budgetary realignment that adds an additional €41 million to the €50 million Steward Healthcare was receiving annually, the health minister has admitted there is no ongoing discussion to revise the contract.

This is in spite of the fact that legally speaking, the corruption surrounding the deal vitiates any ‘obligations’ which the government claims it has towards the contract, which was not only described as such by the National Audit Office (NAO) but was also brought up in court by Steward Healthcare itself using similar terms in litigation documents filed against the Maltese government.

The health ministry’s spokesperson also ignored questions relating to whether the government is aiming to reach an out-of-court settlement with Steward Healthcare and why the government is refusing to scrap the deal when it had referred that possibility to the public throughout two years of negotiations.

While Fearne had blamed disgraced former health minister Konrad Mizzi for the extra €41 million that Steward Healthcare is going to receive, The Shift’s questions on why the government is refusing to rescind the contract despite the concessionaire itself saying the deal it inherited is corrupt also remain unanswered.

Steward Healthcare described the concession as “fraudulent” and “corrupt” in one of the multiple pending court cases surrounding the hospitals deal – its appeal against the enforcement of the verdict of a 2019 London court case filed by former VGH investor Ambrish Gupta, who sued VGH (taken over by Steward) to the tune of $5 million over claims he was cheated out of compensation due to him.

As an evident warning shot to the government, which was seeking to drum up support for renegotiation on the deal, Steward Healthcare filed an unredacted copy of each of the VGH agreements, side letters and correspondence on 23 August 2021 in its attempts to appeal Gupta’s claim.

In this specific case, Fearne and Abela, along with disgraced former government officials Joseph Muscat (ex-prime minister), Konrad Mizzi (ex-health minister) and Keith Schembri (ex-OPM chief of staff), were set to face cross-examination on Steward’s claims last September.

An ever-changing tune

In February 2020, Fearne had told the press that should Steward Healthcare fail to fulfil its commitments, the government would continue insisting that it would get what was written in the contract, going as far as saying that the government “should not bury its head in the sand” on the deal if it is not going as expected.

In reality, the government has handed Steward Healthcare at least €300 million in three years with taxpayers seeing virtually nothing of the promised €200 million investment that was supposed to be the concessionaire’s end of the bargain.

In a heated parliamentary debate in April of the same year, the government had refused to accept a motion filed by the Opposition to rescind the €100 million buy-out clause signed by Konrad Mizzi in 2019. The buy-out clause essentially means Mizzi’s decision gives Steward Healthcare a guaranteed pay day should the contract be terminated.

The prime minister had railed against the Opposition for ‘assuming’ the buy-out clause was definitely going to be paid out, insisting that this was not the case and that government was still considering revoking the contract, amending it, or leaving it as is.

Throughout September and October of last year, Fearne repeatedly told the media that the government was close to reaching an agreement with the concessionaire, neglecting to provide any further details and insisting that Steward Healthcare had obligations it had to honour.

Abela reiterated the same when speaking to journalists the following month. A few days later, Finance Minister Clyde Caruana finally admitted that Steward Healthcare’s investment and related talks were at a stalemate, claiming that it was up to the company to deliver.

By December of that year, the government had unanimously voted in favour of giving the €41 million a year increase to Steward, which Fearne had attempted to pass off as further investment in Malta’s healthcare while neglecting to inform the public that the money goes directly to the concessionaire, irrespective of whether it is spent on healthcare or not.

On 10 January, Fearne replied to Opposition MP Joseph Ellis’ questions on whether contract revision negotiations are still ongoing by stating that no such negotiations are ongoing.

Meanwhile, The Times of Malta has reported that police officers turned up at the home of disgraced former prime minister Joseph Muscat on Wednesday morning seeking documents related to the case and consultancy services he provided to Accutor AG for which he allegedly received €60,000. The company, in turn, received millions from Steward Healthcare when it took over a contract to run three public hospitals from VGH.