While Malta’s hospitals deteriorate, Steward Healthcare insists on renegotiation of concession terms

Steward Healthcare is insisting it will not invest in major upgrades needed due to the government’s reluctance to renegotiate the terms of the concession, even after The Shift reported complaints by patients and staff on the conditions endured.

Replying to questions by The Shift after the news portal reported the conditions at Karin Grech and Gozo hospitals through pictures sent in and interviews held with patients and staff, Steward Healthcare insisted it cannot invest in meeting the terms of the concession it accepted, insisting on a renegotiation that the government has denied so far.

The concession agreement was described by Steward Healthcare itself as “fraudulent and corrupt” and has led to a deadlock between the company and the government.

The Shift’s questions to Steward Healthcare about the conditions at Karin Grech and Gozo General Hospital were answered by a PR agent saying, “we have sustained services at Karin Grech as best we could while acknowledging that certain aspects of the facilities are no longer fit for purpose”.

None of these investments addresses the core issues being faced by patients and staff members, given that Karin Grech Hospital, in particular, was “originally scheduled for demolition when Steward Healthcare took over the concession”.

The government is blaming Steward Healthcare for failing to fulfil its end of the bargain, while Steward Healthcare is blaming the government for not wanting to renegotiate the terms of the €2 billion concession the company took over from Vitals Global Healthcare for a pittance.

When The Shift put to Steward Healthcare the problems voiced by patients and staff in the hospitals it manages, the company referred to 25 ventilators for the Gozo Hospital’s critical care unit to help safeguard against COVID-19, a 29-bed ward at Karin Grech, and an upgrade of the emergency and outpatients departments at the Gozo General Hospital, among the upgrades that cost €6 million.

He also referred to Barts Medical School (opened in 2019) and a “comprehensive staff and training development programme” as two other examples of investments the company has made.

In the last Budget, the annual government allocation to the company was €90 million, while taxpayers also cover staff costs.

While Health Minister Chris Fearne stated that the concession “is what it is” and cannot be changed, the concessionaire claims that the poorly drawn-up concession “does not fit within public-private partnership parameters under the relevant EU rules” to justify its lack of investment.

Steward Healthcare is now saying that the concession it agreed to acquire is not fit for purpose: “The concession does not fall within PPP parameters as dictated by EU rules. As a result, the concession had to be placed back onto the government’s balance sheet, meaning that Steward Malta cannot finance and build new hospital facilities within this structure. On several occasions since 2018, the government informed the EU that a negotiated solution with Steward Malta was imminent, but a conclusion has yet to be reached.”

Steward Healthcare insisted that major projects that require capital expenditure beyond its operating budget cannot be supported by external finance until the concession is removed from the government’s balance sheet. “Financial institutions will not provide us with finance until the concession is returned to our balance sheet, which requires the terms of the concession to be in accordance with EU rules.”

In real terms, the way the concession was structured meant that the whole point of the public-private partnership was defeated when considering that EU rules do not allow for such a concession.

The fact that the concession included a minimum revenue guarantee as well as a government guarantee to take over debt if defaulted on meant that the EU could not even classify it as a public-private partnership, to begin with, putting an even bigger financial onus on the public purse rather than on the private concessionaire.

But Steward Healthcare is complaining because it cannot use the assets (the actual hospitals) for loans as the government still holds them. It wants more.

Steward Healthcare took over the concession the National Audit Office (NAO) criticised as “vitiated”. The NAO report highlights the government’s failure to draw up an adequate framework for the concession and how that led to a failure to hold VGH accountable for ignoring project milestone deadlines.

Steward Healthcare has filed cases in court, with documents submitted showing its attempts to blame the problems faced by the three hospitals on the “fraudulent and corrupt” arrangements made with VGH. It has never explained its lack of due diligence or whether secret dealings with the government fell through.

What the current concessionaire consistently fails to mention is that members of its top brass, including CEO Armin Ernst and president Nadine Delicata, were at VGH before Steward Healthcare’s takeover in 2017.

                           
                               
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KLAUS
KLAUS
1 day ago

Kick them out!
Let ROBBER ABELA show the arrangements.

Francis Said
Francis Said
1 day ago

What a shame of a contract. It is time for the government to take drastic action and kick out Steward and any other individual, entity or company that was involved in this “balbuljata”of a concession.

12X
12X
1 day ago

Nobody believes that Steward USA are still involved in Malta, especially after the doctor-led buyout in USA June 2020.

De La Torre/Armin who are the only two names linked to Steward in Malta have the modus operandi to raise funds through the sale and lease-back of hospitals, turning anything non profitable into real-estate.

They seem desperate to do this with the Malta sites. But as government pays the salaries, what are they giving Malta in exchange for the 90M per year?

12X
12X
1 day ago

https://find-and-update.company-information.service.gov.uk/company/11934840/filing-history

follow the above link to see who ACTUALLY owns the holding company for Steward in Malta. U viva r-Regina.

Francis Said
Francis Said
1 day ago

I am surprised that Steward, prior to taking on the Vitals deal did not carry out any due diligence study on this corrupt deal.
Any company of any size, before it signs the relevant takeover of another company carries out all the due diligence and budget requirements, before it signs the share transfers at the agreed price.
If they do not have the financial means to do so. Should pack up and leave. No compensation required to be received for not reaching its’ targets as set out by the contract.

12X
12X
1 day ago
Reply to  Francis Said

Remember, many of the key Vitals staff, notably Armin Ernst, and Nadine Delicata simply transferred to Steward. Is it even remotely possible that as CEO Delicata did not know what was going on under her own watch?

Does she wish the public to believe that she is that naïve and incompetent, or incompetent and just plain greedy?

John Borg
John Borg
2 hours ago

This is absolutely shameful of Steward!…..so if I understand well, according to the ongoing contract, if the Government of Malta were to rescind the contract for whatever reason, even though the other Party, i.e. Steward Healthcare would have outrightly broken clauses in this same contract, Malta Government would still have to pay a ‘penalty’ of €100m!!….and now these ‘gentlemen’ from Steward ‘expect’ to have the divine right to renegotiate the terms of this shameful contract!!!!…..these are people who really have no shyness at all!!!…..would they be ready and willing to return all the money that was given to them by the Maltese people???…..of course not!!!….these are daylight robbers!!!…..Steward’s request is an opportunity for the Malta Government to tear up the current contract and kick these bastards out once and for all!!!!……Minister Fearne don’t accept this recent request by them and just take back these hospitals!!!!……I have absolutely no doubt that Steward wouldn’t have succeeded in setting foot in Malta if they had tried their gimmicks with Mintoff!!!

John Borg
John Borg
2 hours ago

….. yes it’s high time that we kick them out!!!….Steward have failed miserably to honour their part of the agreement, and have so far only robbed the Maltese people!….so far, what benefit has Malta enjoyed from this partnership with Steward???!!!…..time to send the robbers away for good!!

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