[WATCH] Joseph Muscat insists Cabinet was aware of €100 million side agreement with Steward

Joseph Muscat insists Cabinet was aware of the side agreement with Steward Healthcare that obliged the government to pay the company €100 million if the contract was annulled.

The former prime minister reiterated that all that was discussed in Cabinet is minuted and ample reference to this was made in the Auditor General’s report.

A side agreement was signed in August 2019 between Steward and then minister Konrad Mizzi through which government obliged itself to pay the company €100 million if a court of law annulled the concession.

It is unclear to which National Audit Office report Muscat is referring to since the third and final investigation on the hospitals deal, which should concern the transfer of the concession to Steward in 2018 to date, has not yet been published. The NAO published its first report in July 2020 dealing with tendering process and a second one in December 2021 dealing with the contracts signed with VGH in 2015. None of these two reports dealt with the August 2019 side agreement.

Also, in court, Deputy Prime Minister Chris Fearne testified that at the time, despite him being health minister, all contractual arrangements between Steward and the government were being handled by Mizzi behind his back. And in a Facebook post after a court annulled the hospitals deal, former minister Evarist Bartolo said Cabinet was being used as a "scapegoat".

Talking to reporters outside court in Valletta on Monday, Muscat refused to engage when asked whether Robert Abela’s counsel was sought on the hospitals deal after 2017. Abela was not a minister but sat on Cabinet as the prime minister’s advisor at the time.

“Do not try to drive a wedge between me and the Prime Minister. I have full confidence in the Prime Minister,” Muscat said.

He also refused to apologise for the hospitals concession, a flagship project of his administration, insisting that in this case, it was the government that was the victim of fraud.

“I shouldered political responsibility for the decision because it was in the best interest of the country,” he said. He went on to say that when in government some projects can end up not being implemented as intended.

“When you are in government and you take decisions, there are aspects which go right, and there are aspects which go wrong or are not implemented as planned,” Muscat said. “It was not carried out as it needed to be carried out.”

When it was pointed out that this was much more than a project that did not go right, Muscat insisted that the court ruled the government was a victim of fraud.

The court last month annulled the hospitals deal, attributing fraudulent intent to Steward Healthcare and its precursor Vitals Global Healthcare. The private company failed to live up to its obligations, among others, to build a new hospital in Gozo and refurbish St Luke’s Hospital.

The court also ordered that the Gozo, St Luke’s and Karin Grech hospitals be returned to the government.

Muscat said he expected the “whole truth” to be published in the appeals stage.

The hospitals deal was originally struck in 2015, when government granted a concession for the running of three hospitals to Vitals Global Healthcare (VGH), an obscure company.

The hospitals’ concession had been negotiated by Konrad Mizzi, who was health minister under the Muscat administration at the time. Mizzi was removed from health minister after 2017 but remained responsible for the contractual arrangements with VGH and Steward.