Chris Fearne walked away from new hospitals deal despite recognising flaws, Steward says

Steward Health Care has taken Health Minister Chris Fearne to task after he said the hospitals concession agreement has to be respected in its current form.

The American healthcare company said it was “surprised” by Fearne’s statement last week in response to a parliamentary question.

In a strongly-worded statement on Monday, Steward claimed it had negotiated with Fearne “complete agreements” between 2019 and 2021 to put the “flawed original concession” on a “viable footing”.

The company said these unsigned agreements clearly acknowledge that the current framework is unworkable but government failed to finalise them.

“This means that the Maltese people have not been able to benefit fully from the outcome of a viable concession,” Steward said.

In parliament last week, the Health Minister had said the current concession agreement “is what it is” and government is ensuring contractual obligations are adhered to. He also acknowledged that the level of healthcare provided by Steward in Gozo had improved and ongoing monitoring was taking place.

Steward inherited the concession when it bought out Vitals Global Healthcare after the obscure company went belly-up. Steward has been asking for a renegotiation of the concession agreement but these talks have not reached a conclusion and many of the contractual obligations, such as the construction of a state of the art hospital in Gozo, remain unfulfilled.

The concession covers the Gozo general hospital, Karen Grech rehabilitation hospital and St Luke’s.

The concession agreement is subject to a court case instituted by former Opposition leader Adrian Delia, who is asking for the deal to be scrapped, and a magisterial inquiry.

Steward said the current contractual terms of the concession “have been widely acknowledged by independent observers – both within Malta and in the European Union – to be wholly unsuitable and inappropriate”.

The company insisted the minister’s view contradicts that of the National Audit Office, whose review found that the concession’s terms were based on incorrect information, and that the data provided on its cost structure was inaccurate from the moment the tender was issued.

“Steward Malta states that a payment structure based on a faulty baseline is not tenable and created a non-viable, non-financeable Private-Public Partnership (PPP) from the start. The origins of these terms as negotiated with VGH and the reasons for their presence are under investigation, a period that did not involve Steward Malta,” the company said.

Steward said the failings of the original plans meant that the Maltese people would not benefit from proper facilities.

It said the planned Barts Medical School within the Gozo General Hospital campus was not fit for the intended purpose, and Barts made it clear they would not set up base in Malta if the facility was not built to a level suitable for world class education.

“Steward Malta worked with Barts to build a medical school substantially larger than that anticipated in the concession, but without additional compensation, and in record time. Through this concerted effort, Steward Malta helped cement Barts entry to Malta,” the company said.

Steward said that when it was asked to take over the concession, the Maltese government “conveyed its representations and commitments which, however, were never kept”.

“Steward Malta is complying with the substance of the original contract insofar as it can in this context, and seeks only that the government complies with its side of the agreement too,” the statement ended.