[WATCH] Robert Abela only learnt of Steward €100m penalty agreement after it was signed

Prime Minister Robert Abela says government will insist Steward Healthcare adheres to its contractual obligations but will not pay €100 million penalty if American company pulls out

Prime Minister Robert Abela (Photo: James Bianchi/MaltaToday)
Prime Minister Robert Abela (Photo: James Bianchi/MaltaToday)

Prime Minister Robert Abela has said that he only learnt of the €100 million penalty agreement inked between government and Steward Healthcare in 2019 after it was signed.

Government has held protracted discussions with the American company over its request for more money to honour its obligations in the hospitals concession agreement.

Asked on Tuesday whether former minister Konrad Mizzi had signed the side letter with Steward in the summer of 2019 behind government's back, Abela said he only learnt about it after it was signed. At the time, Abela was an MP and sat in Cabinet as an advisor to then prime minister Joseph Muscat.

The side agreement meant that even if the hospitals concession agreement is rescinded by a court of law, it will be deemed as a government default and the State would have to pay Steward a penalty of €100 million.

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

Choosing his words carefully, Abela said government will insist that Steward honour all its contractual obligations.

"The governmnent will do everything legally possible to get out of the €100 million penalty, if Steward decides to withdraw from the contract," he said. "Our message to Steward is that the government will pursue every legal action possible , should the contractual obligations not be met,"

The Maltese government is refusing demands by Steward Healthcare for an amended concession agreement for higher payments, and MaltaToday reported on Sunday that government has made it clear it will refuse a potential €100 million claim by the American company.

The hospitals concession was originally granted to VGH, an obscure company with no track record in the medical field. However, VGH failed to honour its obligations and went belly up, transferring the concession to Steward in 2018.

The contract is being challenged in court by former Opposition leader Adrian Delia, who is asking for the concession agreement to be terminated. In separate court proceedings Steward is refusing to pay former investors in VGH, claiming that the contract was vitiated.

READ ALSO: Adrian Delia claims Steward’s endgame is to cancel hospitals contract to claim €100m penalty

The National Audit Office has slammed the concession agreement, insisting it was a "predetermined deal".

The NAO had pointed an accusing finger at an agreement signed between the government and some of the investors involved in Vitals Global Healthcare before even the request for proposal was published, questioning the integrity of the eventual concession.