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BOV Warning Induced Konrad Mizzi And Cabinet To Give Steward A Staggering €100 Million Promise

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It was a warning by Bank of Valletta that it felt uncomfortable loaning more money to Steward Health Care which prompted Konrad Mizzi to promise the hospital operator €100 million from public funds in the eventuality that the deal was scrapped.

Ronald Mizzi, permanent secretary at the Tourism Ministry, today provided some insight into the mechanisms behind the scenes as he testified in a case instituted by former PN leader Adrian Delia against the long-term leasing of three Maltese hospitals, St Luke’s, Karin Grech and the Gozo Hospital.

The concession was originally granted to Vitals Global Healthcare, a group of investors which ended up running into financial difficulty and selling its shares to the US company Steward.

Ronald Mizzi says this controversial €100 million promise was necessary to safeguard the hospital project because BOV felt uncomfortable granting a €27.5 loan to Steward since the concession was being challenged in court and was the source of much political controversy.

He said BOV, which had already granted Steward two separate loans amounting to €8 million, was concerned that the court could find these contracts null and void or that a potential new government could end up scrapping the contract.

Asked by Delia why the government involved itself in a dispute between a private company and its lender, Mizzi said it was concerned the project wouldn’t happen otherwise. 

“I know that BOV had asked the government for a guarantee but the government resisted. Steward said that they shouldn’t bear the brunt if the court decides to scrap the contracts.”

Mizzi said he didn’t speak to BOV himself and was first informed of their concerns by the ministry’s lawyers. He didn’t know who BOV spoke to or who instructed the ministry’s legal counsel but conceded it was probably Konrad Mizzi, Ronald Mizzi’s only superior in the ministry.

The Tourism Ministry signed a tripartite agreement with Steward and BOV on 27th August 2019 after receiving a Cabinet memo to go ahead with it. 

This deal promised Steward €100 million in public funds if Delia wins his court case or if the current or future government decides to scrap the deal.

“It ensured that if this had to happen, it would be considered a non-rectifiable event of government default, and would also cover their loans with BOV.”

The court was unable to glean any further information about this deal, and the concession in general, from Konrad Mizzi himself as the former minister refused to testify.

Assisted by his lawyer, the former judge Carol Peralta, Mizzi insisted he has a right not to answer any questions in Delia’s case until a magisterial inquiry into the hospitals deal concludes.

All he provided the court was a brief statement that the project was approved by his colleagues in Cabinet.

“Cabinet gave at least 14 approvals to different phases of the entire project after long discussions, not to mention all the briefings it was given,” Mizzi said.

Cover photo: Front: Konrad Mizzi, Back: Ronald Mizzi

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Tim is interested in the rapid evolution of human society brought about by technological advances. He’s passionate about justice, human rights and cutting-edge political debates. You can follow him on Twitter at @timdiacono or reach out to him at [email protected]

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