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Government MPs Approve €41 Million Increase In Steward’s Budget Despite Controversy

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Government MPs approved a €41 million increase in budget allocations for Steward Healthcare, which runs the controversial and allegedly corrupt concession to run three state hospitals.

During a parliamentary sitting that was dominated by the approval of a bill effectively legalising cannabis for personal use, all government MPs approved the health budget, with PN MPs voting against. 

According to the budget estimates for 2022, Steward Healthcare will be getting €69 million to run the hospitals next year. That’s a €41 million increase, roughly 80% higher than the previous year.

Deputy Prime Minister Chris Fearne and PN Leader Bernard Grech clashed over the issue, with the former insisting that the funds are necessary for Malta’s health care service, with the latter lambasting the government for continuing to support the deal. 

The vote happened soon after the Auditor General confired that Vitals Global Healthcare, the original concessionaire, had not reached any of the milestones it was bound to.

VGH had first been granted a controversial concession for the Gozo General Hospital, St Luke’s Hospital and Karin Grech Rehabilitation Hospital. Mizzi was the minister responsible for the project.

It has been revealed that the government signed a Memorandum of Understanding months before a request for proposals was even announced. It has been mired in corruption claims and is currently subject to a magisterial inquiry. 

The company was forced to sell off their operations to Steward Health Care just 21 months after starting amid growing financial debt, which stood at €36 million by the end of 2017. Its CEO, Ram Tumuluri, reportedly still made off with a €5 million bonus.

An un-redacted contract revealed that taxpayers were paying VGH around €188,000 a day (€70 million a year) to provide hospital beds to the state, €1.2 million a year for the Barts medical school and a further €1 million for a helicopter service.

Steward Healthcare was brought in to replace them, with VGH unable to pay its employ. They were given certain assurances by the government, namely from Mizzi and Muscat when they were brought in to save the failing concession.

This included a massive €100 million buyout should the concession be rescinded and a secret €8 million bank guarantee (which has since been waived).

It was recently revealed that Muscat was paid €60,000 from Accutor AG and Spring X Media, two Swiss companies owned by Pakistani lawyer Wasay Bhatti, in the early months of 2020, shortly after his resignation as Prime Minister.

Accutor AG had received €3.6 million from Steward Healthcare during the company’s takeover of the hospital contract from Vitals Global Healthcare.

The deal has created massive gaps in operations – with Steward staff being paid less than their state counterparts for doing the exact same job. Meanwhile, the government continues to fork out millions for a service that is not too dissimilar from Malta’s national health service.

Former PN leader Adrian Delia had instituted court proceedings calling on the courts to cancel the contract. 

Earlier this month, in a joint judicial letter, Delia and Grech, said they would be holding the Cabinet responsible for the detrimental effects of the contract on the country. 

Prime Minister Robert Abela has insisted that it would be taking legal action against Steward Health Care over any breach of the conditions of the concession contract.

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Julian is the Editor at Lovin Malta with a particular interest in politics, the environment, social issues, and human interest stories.

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