Opposition fumes as Steward is paid €40 million over and above budget

An additional €40 million has been allocated to the health budget for American concessionaires Steward, who operate three state hospitals, over and above €50 million first allocated to the company in last year’s 2021 Budget.

Nationalist MP Claudio Grech said he was outraged at the supplementary estimates tabled yesterday in the House, as MPs from the government side approved the legalisation of recreational cannabis.

“It happened while everybody was in a stupor about the legalisation of cannabis, that the Supplementary Financial Estimates were tabled, in which more finance was allocated to the sectors that went over-budget,” Grech said.

The health concession agreements for the Gozo and Karin Grech hospitals, where the State pays Steward Healthcare for the labour resources that work at the state hospitals, were in 2021 costed at €35.6 million and €13.6 million respectively.

These budgets have now been increased by €26.5 million, and €13.9 million, respectively.

The supplementary allocation brings the total payment advanced to Steward in 2021 to €89 million.

The Opposition voted against the supplementary allowance. “The government is voting in favour of Konrad Mizzi – it is an accomplice in this kind of daylight robbery,” PN leader Bernard Grech said.

The financial vote was approved in the House on the same day a damning National Audit Office excoriated the procurement methods employed in selecting the now-defunct Vitals Global Healthcare.

“The NAO published the greatest condemnation yet of this concession, but a 82% increase in their funding was approved – this health service is not even being delivered, and yet it is getting more money.”

Steward is running three State hospitals, Gozo, Karin Grech and St Luke’s, as part of the 2014 deal crafted by the Muscat administration with the unknown Vitals Global Healthcare to run the hospitals on behalf of the State.

In an uncompromising excoriation of the contract, the NAO said the failures of Labour’s privatisation of the state hospitals was down to the selection of VGH as the concessionaire, “a poor choice that set the stage for what was to come.”

“The negotiations that quickly followed selection were similarly flawed, conditioned to an extent by the structural anomalies and organisation of the Ministry for Energy and Health and the general ill-preparedness in terms of what was sought by government through this concession.”

The defunct Vitals Global Healthcare achieved none of its milestones when it took control of three state hospitals in a controversial, multi-million privatisation deal.

The NAO report found that the unknown investors in VGH, led by Canadian boss Ram Tumuluri, was unable to secure financing and this became the crucial shortcoming on which all subsequent failures followed.

“All VGH’s commitments regarding the envisaged improvements to infrastructure and services were rendered unattainable in view of this failure.”

But the NAO said it was the Labour government’s acquiescence to these evident inadequacies that also mirrored VGH’s failures. “Instead, the government’s representatives, while bypassing Cabinet, endorsed multiple waivers of the requirement to secure financing, thereby perpetuating the failure that this concession came to represent.”