Robert Abela fails to call out predecessor for Steward hospitals deal wrongs

Updated at 8:30pm with Bernard Grech speech

Robert Abela has distanced himself from the Steward hospitals deal, insisting that none of the agreements cancelled by the court were entered into after January 2020.

“No agreements were signed with Steward since January 2020 when I became prime minister,” Abela insisted in parliament on Monday.

This was the closest the Prime Minister came to drawing the line between him and his predecessor Joseph Muscat on whose watch the hospitals deal was struck.

However, Abela never called out Muscat by name for the wrongdoings flagged by the court at every stage of the hospitals deal and failed to apologise to the people. Instead, the Prime Minister simply said that his administration built on the good of his predecessor but took steps to “reform where things were not done well”.

The Prime Minister told parliament his government repeatedly refused requests by Steward to amend the concession agreement.

He was speaking during an urgent parliamentary debate on the Steward hospitals concession after a judge struck down the agreement last Friday.

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Konrad Mizzi

Former minister Konrad Mizzi

In a veiled reference to Konrad Mizzi, who was singled out by the court for the agreements he signed with Steward, presumably behind Cabinet’s back, Abela said many people today understood why he took difficult decisions soon after becoming Labour leader. The Labour Party executive kicked Mizzi out of the party in 2020 on a motion put forward by Abela.

The Prime Minister underscored what his administration did since January 2020 in its exchanges with Steward.

“We always told Steward to adhere to its contractual commitments and after January 2020 the tax authorities chased Steward for their tax dues. No payments over and above those outlined in the agreements were made to Steward and government insisted it would not make changes to the agreements pending the court judgment,” Abela said.

He insisted that his administration took decisions in the country’s best interest and stopping all payments as the Opposition had called for could have put medical care at the three hospitals in jeopardy.

“I have no remorse for how my administration acted and our position was always to wait for the court judgment without giving Steward the chance to seek some form of compensation,” Abela said.

He reiterated that government asked the court to reduce the period of appeal, a decision that is expected on Wednesday.

“If someone appeals, government will ask for this to be heard with urgency because we want legal certainty as quickly as possible to be able to move forward with our plans for the sector,” Abela said.

Adrian Delia: Immoral government

PN MP Adrian Delia

The debate was opened by Nationalist MP Adrian Delia, who had initiated the court case in 2018 to have the hospitals deal rescinded.

Delia accused the Labour of administration of “immoral behaviour” when it agreed in 2019 to give Steward “a €100 million gift” if the contract was struck down by the court.

“Government wanted to gift fraudsters €100 million,” Delia charged as he referred to the court’s conclusions that fraud was present at every stage of the concessions deal.

Delia asked what steps government was going to take to recover the €300 million paid to date to Steward.

“It was immoral to continue paying Steward… €300 million in fraud were paid and many more would have been forked out had this case not been instituted and decided in my favour,” Delia said.

In an impassioned speech, Delia turned to the Prime Minister and asked him who will be shouldering responsibility for this fraudulent deal.

“We got the hospitals back; now it is the government’s job to bring back the €300 million spent on this fraudulent concession,” Delia said.

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Bernard Grech: Court’s ruling saved country from €100 million penalty not government

Bernard Grech called out the Prime Minister for saying that government will not pay a single cent in penalties to Steward, insisting this was the result of the court ruling.

“The €100 million will not be given to Steward because the court said so and not because of any government decision,” Grech said.

He accused Abela of “choosing the corrupt” after he became prime minister in January 2020 by persisting with the Steward deal.

“When Robert Abela defends himself by saying that he was not even an MP when the deals were signed, he is implying that Labour MPs who were there at the time are accomplices,” Grech said.

Turning to Police Commissioner Angelo Gafà, Grech said that rather than send 20 police officers outside PN headquarters on Sunday because he feared trouble would erupt, he should have sent the police to arrest the culprits of the corrupt Vitals deal.

The judgment

Steward Healthcare President Armin Ernst (left) with then prime minister Joseph Muscat

The government and the Opposition agreed to suspend Monday’s parliamentary agenda to hold the debate. No vote will be taken.

The emergency debate was held after a judge on Friday struck down the hospitals deal and ordered that the three buildings – Gozo, St Luke’s and Karin Grech hospitals - be returned to the State.

In a scathing judgment, Mr Justice Francesco Depasquale attributed “fraudulent intent” to Vitals, the original concessionaire, “bad faith” to Steward Healthcare, the American company that took over the concession, and “ingenuity” to public officials who allowed the government to end up with its back against the wall.

The judge singled out Konrad Mizzi for striking agreements that kept benefitting the concessionaires and described the €100 million buy-out clause agreed between the government and Steward in August 2019 as “possibly criminal”. He also described the concession milestones as “a complete farce” and said government’s due diligence on Vitals as “amateurish checks”.

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The scandal

The deal, a flagship project of the Muscat administration, was concluded in 2015 after government issued a request for proposals for the running of the three public hospitals. Vitals Global Healthcare, a company with obscure ownership and no history in the medical field, was awarded the concession. An audit concluded by the National Audit Office in 2020 revealed that the tender was a done deal, confirming that some of the investors in Vitals had already signed a memorandum of understanding with the government months before the RFP was issued.

VGH failed to live up to its contractual commitments and in 2018 the concession was sold to Steward Healthcare, an American company, described by Health Minister Chris Fearne at the time as the “real deal”.

Steward also failed to fulfil its contractual obligations and on Friday the court ruled on a case that had been filed by former Opposition leader Adrian Delia to have the contract rescinded.

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