Steward must fulfil its contractual obligations, Chris Fearne insists

The concession is still valid, he said on Wednesday

The Maltese government must make sure that Steward Healthcare is fulfilling its contractual obligations under its concession to operate three local hospitals, Health Minister Chris Fearne said on Wednesday.

Responding to questions from MaltaToday, Chris Fearne insisted that the concession has remained in its original state despite negotiations over the past year and a half.

“But the concession is still valid,” he said. “Government has its obligations, but so does Steward. We need to make sure that Steward will fulfill these obligations.”

Fearne previously insisted that government will take action against Steward should the company fail to fulfill its commitments.

Steward was awarded a concession to run the Gozo, St Luke’s and Karin Grech hospitals. However, the deal was initially entered into with Vitals Global Healthcare in a controversial multi-million deal.

The National Audit Office deemed the contract “predetermined” in its report while pointing to an agreement signed between government and some of the investors involved in Vitals Global Healthcare before the request for proposals was published.

MaltaToday had revealed that government was planning to take back the three hospitals by halting the emphyteutical deal on the land.

By stopping the deal, the hospitals will be owned by government, but Steward Healthcare will remain the facility managers responsible for the upkeep and equipping of the hospitals.

However, government is exposed to a level of risk on the hospitals’ concession. The agreement hammered out in August 2019 with former tourism minister Konrad Mizzi has given Steward Healthcare an “escape clause”, that turns any termination of its concession into a government default.

The agreement’s wording means the government has no wriggle room should Steward be found in breach of the concession by any tribunal: the decision will instantly trigger an obligation on government to pay out €100 million in cold cash, and take on any lenders’ debt.

Prime Minister Robert Abela said on Tuesday that he only learnt about the side clause after it was signed. At the time of the agreement, Abela was an MP and sat in Cabinet as an advisor to then prime minister Joseph Muscat.

Similar to Fearne, insisted that Steward honour all its contractual obligations.

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