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Malta Hopes Proof Of Vitals Wrongdoing Will Help Void €100 Million Penalty For Terminating Steward Contract

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Malta’s government is hoping that allegations of wrongdoing in the Vitals Global Healthcare deal will allow them to escape a massive €100 million penalty if they force Steward Health Care out of the controversial concession to operate three state hospitals.

Negotiations over the current contract have reached a stalemate with the Health Ministry and Steward simply unable to meet eye to eye. Malta’s government has been attempting to get back the concession, which has seen the state waste millions of euros every year with few tangible results. 

Sources have described Health Minister Chris Fearne as playing hard ball on the deal, often times accepting new terms in a new contract, only to backtrack soon after. Steward on their part is entirely reluctant. to simply walk away from the deal, especially when armed with a contract that is overwhelmingly in thier favour.

Sources spoke to Lovin Malta in the wake of two articles appearing on Malta Today and Times of Malta, which claimed that Fearne is furious with the new contract, even though he was Health Minister at the time it was signed. He claims that he only heard about the details 18 months after the deal was signed.

The government is hamstrung by an awful deal pushed by former Prime Minister Joseph Muscat, Keith Schembri, and former minister Konrad Mizzi to bring Steward to save VGH’s failing concession.

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.

Proof of wrongdoing may declare the initial VGH deal null and void. However, the government is reluctant to do so, as it would confirm the corruption of one of the landmark deals under Muscat’s tenure. 

What do you think of the deal?

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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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