No government witnesses summoned in Delia case against Steward hospitals deal

No witnesses were summoned by the Maltese government to support its defence of the Vitals hospital deals, with the evidence stage in the case filed by former Opposition leader Adrian Delia, over the privatisation of three government hospitals, being declared closed.

In the case, which was filed in 2018, Delia had asked the courts to declare the agreement between the government of Malta and VGH – since then superseded by American company Steward – null and void, in view of the fact that Steward had failed to adhere to the obligations laid down in the contract. 

The case was originally filed against the Prime Minister, VGH, the Attorney General, the CEO of Malta Industrial Parks, and the chairman of the Lands Authority’s board of governors.

Steward Healthcare replaced VGH after the latter defaulted on its contract, taking over the running of the St Luke’s, Karin Grech and Gozo Hospitals in 2017.

When the case was called before Mr Justice Francesco Depasquale on Tuesday afternoon, Delia exhibited a number of documents, consisting for the most part of laws and regulations, as well as notarial acts and copies of the government gazette. Delia’s lawyer, Edward Debono had declared that there was no further viva voce evidence from his side.

The defence informed the court that it would not be summoning any witnesses to testify viva voce.

The court adjourned the case to October, giving the parties two months each to submit their notes of submissions.

Taking to Facebook after the sitting, Delia tagged Prime Minister Robert Abela in a post, pointing out that the Prime Minister had summoned no witnesses and promising to “fight till the end for the people of Malta and Gozo.”

The failure to summon any witnesses in such a high-profile case is surprising and is already being interpreted in some quarters as reluctance on the part of the Prime Minister and government to disprove Delia’s allegations. 

The case continues in October.

Previously, Delia said that that while he submitted documentary evidence that Steward has not upheld the concession’s milestones, the company’s response has been weak at best.

“They did not even send a representative for me to cross-examine, and their photographic evidence of works done at the hospitals did not even come with, say, a hit-list of their accomplishments... since they are not rebutting what I’d describe as robust evidence against them, I ask myself: what are they doing to save their own skin?”

Delia insists that Steward’s own admission, in a case challenging VGH investor Ambrish Gupta’s expectations of a €6 million pay-out in a London court, that the original concession was obtained fraudulently, means the hospitals privatisation contract has to be rescinded.

“If the basis of the concession as it was awarded to Vitals and its secret backers was fraudulent, as Steward is now telling Gupta himself, then any instrument that came thereafter, like Mizzi’s side-letter, cannot be upheld,” Delia said.

That would mean, the MP claims, that a court decision upholding his request to cancel the contract, would also attack Steward’s claim for a €100 million payout if its contract is rescinded.

The big mystery: If nobody benefits, why did Mizzi give Steward €100m exit penalty?

MaltaToday revealed the existence of a side letter in March 2020, showing how the Maltese government was exposed to a hefty bill should the Steward concession ever be rescinded.

The agreement was hammered out in August 2019 when former Labour minister Konrad Mizzi gave Steward an “escape clause”, that turns any termination of its concession into a government default.

The agreement laid down that should the hospitals’ concession be terminated by a court of law – for whatever reason, and even if Steward is in breach of contract – such an event would be a government default.

And that would mean that all debts incurred by Steward would be passed on to the government, with the American company eligible for a €100 million contractual pay-out for its equity.

Steward acquired the 30-year concession to run three state hospitals as a private concern in December 2017 from Vitals Global Healthcare, an unknown consortium of medical entrepreneurs granted the concession in 2015. But VGH racked up millions in debt with nothing to show for it, negotiating a buy-out of some €15 million from Steward.