Conflicting narratives about the Steward hospital deal raise more questions than answers

Steward Healthcare has long been trying to get the government to renegotiate the terms of the concession deal for the running of Malta’s three hospitals and in what appears to be a renewed attempt to increase the pressure on the government, Steward Healthcare is becoming a lot more vocal about its own version of events.

In an opinion piece published in The Times of Malta, President of Steward Healthcare Malta Nadine Delicata blamed the government and the former concessionaire Vitals Global Healthcare (VGH) for the current situation.

It’s everyone’s fault (but Steward’s)

Delicata chronicles how “the difficulties were evident from the start” and that “Steward Healthcare was approached by the Maltese government to take over the concession, which, at the time in 2018, was in a state of dire emergency”.

The claim also referred to how “the government gave Steward Healthcare a mere two weeks to agree to take on the responsibilities of the concession and ensure doctors, nurses, cleaners and everyone else whose livelihoods depended on VGH could get their salaries paid. This came with a commitment, to Steward and to the wider community (including the European Commission), that the terms of the deal would be renegotiated to make the concession viable”.

Delicata also blamed the government for “failing to detect” the €37 million in unpaid VAT by VGH, which was bought by Steward Healthcare for the grand sum of €1. The deal is worth €2 billion.

However, one of the more extraordinary declarations in the published piece is the one that describes how “on taking over VGH’s operations, Steward Healthcare also discovered that there were no management accounts at all, and that – shockingly – there had never been so much as an attempt at an audit of the company by the relevant authorities. VGH’s owners had been left, unattended, with a massive amount of taxpayer money, with no one checking up on how they were delivering on their commitments”.

That is indeed shocking but perhaps not in the way Delicata intended. She must have missed the point about what this says about Steward Healthcare and the deal it willingly took on, moving forward with a man at the helm who was with VGH from the start – CEO Armin Ernst.

Due diligence?

The idea that Steward Healthcare only found out that VGH did not keep audited accounts raises, at the very least, questions about the company’s due diligence practices.

There is no mention of the role of Armin Ernst, who left Steward Healthcare to become VGH’s CEO in July 2016 and joined Sri Ram Tumuluri and Shaukat Ali in their global pitches and signing of agreements with other countries.

Ernst then resigned from his position at VGH in 2017 and went back to Steward Healthcare.

The implication that, as CEO, Ernst had no idea of the financial arrangements in place for VGH with the government and had no access to VGH accounts or its financial situation, is at the very least bizarre. What’s more, Delicata was also a senior VGH official, Vice President for Operations at the time. She, too, was present in both companies.

What is not being said

Nadine Delicata’s opinion piece, reproduced on the front page of The Times of Malta for added impact, makes no mention of the money currently being forked out by the government.

By the end of 2022, taxpayers will already have paid over €300 million to Steward Healthcare for the running of three public hospitals, while the company has yet to fork out the €200 million in investment it was contractually bound to deliver by September 2018 – more than three years ago.

While the government and Steward Healthcare continue disseminating their own version of events, an exercise by The Shift shows that some €230 million have already been paid by the government, while a further €90 million has been budgeted for 2022.

An analysis of the budget figures shows that in 2021 the government handed out a daily payment of €138,000, amounting to a total of €50.4 million passed on to Steward Healthcare’s coffers for that year alone. Steward Healthcare’s daily fees for 2022 are set to increase to some €200,000 a day.

The additional budget allocation was made although the government had said it was renegotiating the concession agreement, although it then said there was no conclusion on the new pact.  Now, Steward Healthcare is saying negotiations must move forward as it sets its own demands on the government despite taking over a concession involving people at the helm of both companies now admitting the deal is “corrupt“.

Opposition MP Adrian Delia continues to pursue the case in court to have the three public hospitals given to a private firm returned to the Maltese public.

Meanwhile, as an election looms, and with the government having kept the contracts and any negotiations secret, the public is forced to watch Steward Healthcare twisting the government’s arm by investing in a legal and public relations exercise to get more out of Maltese taxpayers.


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2 years ago

A great synopsis of what happens when those with ulterior motives , especially enriching their own pockets, get caught out for having been less than economical with the truth.

It is not an unreasonable assumption to make that in the context of the US State Department press release of December 22nd where they speak of credible evidence of corruption within Malta’s government circles that Steward is being encouraged to light the blue touch paper under the rockets which are aimed at all the usual suspects involved in yet another massive financial scandal.

Who are the sacrificial lambs that are going to be offered at the alter of justice so that Abela can buy a little more time for himself and the hitherto untouchables ?

Paul Pullicino
Paul Pullicino
2 years ago

How does Steward explain that their man Ernst, in 2015 migrated to a competitor company supposedly owned by “others”, to become its CEO, and then in two years of running the Vitals “fireplace” (apologies to Clyde), negotiates staying on with the incoming Steward? As the CEO of Vitals, he must have known about the 5m bonus to Tumuluri, the 3.6m transfer to Muscat’s pay agent Accutor, the unpaid tax of 34m and what was otherwise involved in getting the other crooks in the OPM to agree to the “one euro” assignment of the contract.

carmelo borg
2 years ago

U il gvern ta Abela jixraqlu jerga ikun fil gvern wara dan is serq kollu lil poplu malti u alla ibierek Konrad u Muscat ghadhom jigru barra qisu qatt ma kien xejn. Poplu GAHAN blajt il lixka ta ftit frak li ghadu kif taghna u kuntent KURRRRRR. MEQ MEQ

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