Steward’s ship has sunk

The government’s agreement with Steward Healthcare is so fraught legally, politically and financially that it has now become a hot potato for which nobody seems to want to accept responsibility.

And with a general election approaching, where one of the Labour Party’s battle cries is that it can be trusted with health, government officials are torn between their unwillingness to rescind the deal and giving the impression that something is actively being done to fix it.

The public is presented with confusing and often contradictory narratives, whether it is in the form of government officials denying any knowledge of Mizzi’s 2019 deal or Prime Minister Robert Abela implying that the government is about to take bold legal action.

Even the concessionaires, Steward Healthcare argued that the deal is fraudulent in one court case while defending their record in another case. The principle of falsus in uno, falsus in omnibus does not seem to apply here.

We can now add to this list of contradictions the latest disclosure published in The Times of Malta that Konrad Mizzi had in fact obtained cabinet approval to sign a “secret” agreement triggering a €100 million government pay-out to Steward Healthcare, but that the precise details of the clause were not clearly spelt out to the Cabinet, neither was a copy of the agreement distributed.

The line put forward is that the way the memo detailing the agreement was “slipped in” to the Cabinet meeting by Mizzi was inadequate but they don’t elaborate as to whether any Cabinet member asked for clarifications or for a copy of the agreement at the time.

When the same newspaper sent questions to Chris Fearne about the Cabinet decision to let Mizzi sign the contentious agreement, a spokesperson replied that the deputy prime minister is not at liberty to discuss Cabinet matters and added that “the deputy prime minister reiterates that the first time he was made aware of the contents of the mentioned side letter was in 2020, after it had already been signed”.

Yet in an earlier interview with Lovin Malta in January, Fearne had defended the controversial deal involving three of Malta’s public hospitals. “Steward is a serious company. I’ll tell you. They run about 40 hospitals in America, they run other hospitals outside of Malta. They are a serious company, I’ve visited their hospitals,” he said.

Fearne added: “I’m not unhappy to be working with Steward. But yes, there is an NAO report.” And, “We were happy for Vitals to be replaced by Steward.”

And yet, Steward Health Care has so far defaulted on its obligations including a promised €200 million investment it was contractually bound to provide by September 2018, as well as an overhaul of St Luke’s and Gozo’s general hospitals, neither of which have materialised.

Now that the government is facing increased calls to address this crumbling deal, Robert Abela told the press last week that the government will pursue “all possible legal action” against Steward Health Care if the company fails to honour its contractual obligations (which it has already failed to do).

An analysis by The Shift found that, by the end of next year, taxpayers will already have paid over €300 million to Steward Health Care for the running of three hospitals while the American company has yet to fork out its promised €200 million investment.

The government has got itself into a colossal mess with the hospitals agreement, particularly with the €100 million buy-out clause for Steward Health Care signed by disgraced former Minister Konrad Mizzi in 2019.  It is becoming increasingly evident what a bad hand the Maltese taxpayer has been dealt.

Government officials don’t quite want (or know how) to credibly address this costly problem, even though we know that there is not likely to be any good outcome on this issue.

That ship has sailed, and it has sunk too; not so much like the Titanic but like the Swedish warship, the Vasa, that sunk after sailing approximately 1,300 metres on its maiden voyage because of a design flaw.

The king’s subordinates lacked the political courage to openly discuss the ship’s problems or to have the maiden voyage postponed. She was ordered out to sea and foundered only a few minutes after encountering a wind stronger than a breeze, in front of a large hapless crowd, while pandemonium reigned on deck.