Steward announces termination of concession agreement

Steward Health Care Malta announces it will be terminating the services concession agreement with government, citing breaches of commercial agreements

Steward Health Care Malta has announced it will be terminating the services concession agreement with government, citing breaches of commercial agreements.

“The company is disappointed at the Government of Malta’s failure throughout this engagement to keep faith with the spirit of the public-private partnership agreement,” it said in an announcement.

The surprise move comes just 24 hours after Steward appealed the court ruling that annulled the concessions agreement.

Steward said the government failed to be accountable for its own liabilities, which it claimed have escaped scrutiny.

“[Government] failed to adhere to their own promises to renegotiate the ‘unbankable’ and unsustainable terms of the concession, not once but three times – and more recently being engaged in negotiations up to the time of the verdict; and, therefore, failed to enable Steward to raise finances to deliver fully on the terms of its engagement,” it said.

SHC said it will ensure there is an orderly transition of the management of its operations and will work with the relevant authorities “in good faith to ensure this is finalised in a reasonable timeframe.”

Government is rejecting the claims outright.

The company said it operated at all times in accordance with the highest professional standards and values, including a desire for good governance and transparency.

“SHCI is concerned about the deterioration of the business environment in Malta. A decline in the rule of law, shown by the recent Civil Court judgement, and a lack of support for and protection of foreign investors has been mirrored by the recent presence of Malta on the grey list of the Financial Action Task Force (FATF), which identified serious structural deficiencies in Malta’s governance and regulation that do not accord with SHCI’s own values,” the statement read.

Steward said government’s failure to appeal the Civil Court verdict that labelled its own behaviour corrupt is an admission of guilt in relation to its own governance failing.

The company said both the US Embassy and the State Department have been informed of the decision.

“SHCI’s exit from Malta will allow the company and its management to focus resources on jurisdictions that are more accommodating to and protective of investors, and more aligned with its high standards,” it said.

Last February, Justice Francesco Depasquale did not mince his words in his scathing judgement on the Government’s privatisation deal with Vitals Global Healthcare and subsequently Steward Healthcare.

The deal was originally struck in 2015, when government granted a concession for the running of three hospitals to Vitals Global Healthcare (VGH).  The hospitals’ concession had been negotiated by Konrad Mizzi, who was health minister at the time.

Under that agreement, Vitals was handed St Luke’s Hospital, Karin Grech Hospital and the Gozo General Hospital. The deal with VGH, a relatively known consortium at the time, had caused many a raised eyebrow. Less than two years after being granted the concession, Vitals sold it to Steward Healthcare together with €55 million in debts accrued by VGH, for the nominal price of €1.

Steward on Wednesday appealed the judgment that annulled the contract, while also requesting a preliminary ruling by the European Court of Justice.

The American company said in a statement on Wednesday that it “emphatically rejects the narrative of the judge’s findings” in cancelling the deal.