Muscat shifts responsibility for hospitals deal onto cabinet

Former Prime Minister Joseph Muscat has insisted all concession agreements and decisions were carried out with cabinet’s approval.

“While I need more time to analyse the Civil Court’s sentence, I respect the decision as I always did,” Muscat said on Friday.

In a landmark victory for former opposition leader Adrian Delia, the court on Friday annulled all contracts awarded to Vitals and Steward in a damning ruling suggesting 'fraudulent intent'.

The court has nullified all contracts awarded to Vitals and Steward, and ordered all property to be returned to government.

Muscat said at every stage of the hospital concession, “which included hospitals that had been abandoned or closed for years, were done with continuous discussions and documented decisions of the cabinet."

“For the deal to happen, the process had to undergo legal scrutiny,” he said.

He also welcomed any other investigation into the case. "This is because I want all the facts to be known. I have always acted in the interest of the people and people of good will know this," he concluded.

Muscat's testimony in the case

In testimony delivered on 18 January 2021, Joseph Muscat, Prime Minister at the time that the concession had been granted, stressed that it was his decision that St Luke’s Hospital as well as Karin Grech Hospital, and the Gozo General Hospital would benefit from “appropriate investment” so that they could be “restored to a good state and provide the citizen with a better service.”

That investment had to come from the private sector, Muscat said, because the Government “had no money.” It was for this reason, Muscat said, that he had tasked the entities concerned to proceed with a public call.

He stressed that the project had been discussed by the cabinet twelve times, until it was eventually approved by the entire Cabinet. Muscat said that he had been told that third parties had made a proposal to Malta Enterprise regarding investment in hospitals but, after a presentation that had been made to Dr Konrad Mizzi and Mr Chris Fearne, who at the time were both in the Ministry of Energy , Health and Projects, he had been informed that the proposal was not in line with the Government's vision to modernise and bring in the involvement of the private sector.

He insisted that the fact that members of Vitals had entered into a Memorandum of Understanding with the Government, before the company had even been set up, had absolutely no relevance in the awarding of the final contract to Vitals and that there was no no reason why Vitals should not have been considered and eventually given the final concession.

Asked why the Government had accepted that the contract be assumed by Steward Healthcare instead of Vitals, despite the clear shortcomings in it, Muscat had stated that "when faced with a situation where you have a major American international company that is looking at expanding its horizons outside the United States and outside certain other areas and wants to enter Malta, a Government that does not allow this to be done would be irresponsible," wrote the judge.

Muscat had blamed limitations imposed on the Government by the European Union as well as the Government's financial limitations, for making private investment the only way for serious and effective investment in hospitals. At the same time, he had denied interfering in the process of awarding the contract, saying he had left it to whoever was running things, namely the Ministry of Energy, Health and Projects, under Konrad Mizzi.

Asked about the existence of the side contract Muscat had said he was aware of the agreement but expressed surprise at the €100 million sum mentioned. He told the court that he understood that should this case result in the Government taking back all the assets involved, the Government would have to reimburse the local Bank who lent Vitals the money.

Muscat had insisted that it was not true that there had been no investment in the hospitals, adding that in the case at hand, it was not only a matter of investment, but also a matter of leadership and vision, which Muscat described as “a success.”

The court noted that Muscat had also indicated that Steward's involvement had not been the result of any Government intervention, saying that they had approached the Government of their own accord. It also noted that the former Prime Minister “had not been in a position to say if it was Vitals who actually approached them.”