Joseph Muscat shirks responsibility, blames ‘hidden vested interests’ for Steward hospitals deal failure

Former prime minister Joseph Muscat issues dry comment on Appeals Court ruling that confirmed the annulment of the hospitals deal and blames failure on ‘vested interests opposed to modernisation of national health systems’

Joseph Muscat and Steward Healthcare CEO Armin Ernst (right) in this file photo shortly after the hospitals concession passed on to the American company
Joseph Muscat and Steward Healthcare CEO Armin Ernst (right) in this file photo shortly after the hospitals concession passed on to the American company

Joseph Muscat has pinned the failure of the Steward hospitals deal on “hidden vested interests, opposing the modernisation” of Malta’s public healthcare.

In a dry comment published on his Facebook page, the former prime minister did not identify those with a ‘vested interest’ to see the project fail, insisting that the waivers granted at a political level were intended to solve problems that arose along the way.

The Appeals Court on Monday confirmed the original verdict that the contractual agreement was null because certain milestones were not reached but made it clear that the deal was underpinned by collusion between government entities and the private companies involved – Vitals and later Steward.

Muscat insisted the agreement could have brought “numerous benefits” to the country, citing the Barts Medical School in Gozo as one of these successes. He said the transition from VGH to Steward was “a significant milestone” and could have been a “transformative moment” for public healthcare but acknowledged progress may not have been as rapid as intended.

“However, there were various challenges that hindered the full realisation of this project. Hidden vested interests, opposing the modernisation and proper accountability of our national health systems, played a significant role in obstructing the complete implementation of the Public-Private Partnership,” Muscat wrote.

He then referred to the Court’s statement that there was collusion involving unidentified officials. “This conclusion is based, among other things, on different waivers authorised at the political level throughout the entire concession period, with the aim of finding a satisfactory solution,” Muscat said, effectively shirking any responsibility for the claimed collusion.

“To avoid any misinterpretation, it is important to note that I have consistently emphasised the need for a comprehensive and unbiased analysis into any potential misconduct, rather than the politically motivated witch hunts that are currently taking place,” he continued.

Muscat insisted that he was committed to make sure the whole truth is known.

The Muscat administration had granted on concession three public hospitals – the Gozo General, St Luke’s and Karin Grech – to the unknown outfit Vitals Global Healthcare (VGH) following a request for proposals. The Auditor General had cast serious doubts on the honesty of the tendering process given that the main investors in VGH had months earlier signed a memorandum of understanding with government for the part privatisation of the Gozo and St Luke’s hospitals.

VGH failed to make the promised €200 million investment to build a new hospital in Gozo and refurbish St Luke’s with the concession eventually passing onto the American healthcare company, Steward.

Immediately, Steward sought to renegotiate the deal and in summer 2019 entered into a side agreement with then minister Konrad Mizzi that put the onus on government to pay a penalty of €100 million if the courts annulled the contract. The side agreement was a reaction to the court case initiated by then Opposition leader Adrian Delia who sought the cancellation of the deal on the basis of unfulfilled obligations.

The case was decided in February when the court annulled the deal, including the side agreement. The decision was confirmed this week on appeal.
The promised Gozo hospital never materialised and St Luke’s, which had to serve as a hub for medical tourism, remains abandoned.

A magisterial inquiry initiated in 2018 following a complaint by NGO Repubblika is still ongoing and may yet indicate whether there is scope for criminal action to be taken against several public officials involved in the deal.