The Malta Independent 20 April 2024, Saturday
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‘No negotiations on-going’ between government, Steward Health Care over concession, company says

Kevin Schembri Orland Wednesday, 23 February 2022, 09:17 Last update: about 3 years ago

There are no negotiations currently taking place between the government and Steward Health Care Malta over the hospitals concession agreement, a spokesperson for the company confirmed with The Malta Independent.

The government had often said that it was ‘close’ to reaching a deal with the company, however Steward Health Care Malta has now said that negotiations are not currently taking place, thus showing that something had happened along the way.

In responding to questions sent by this newsroom, a Steward Health Care Malta spokesperson has also brought some new information to light, that “the US Ambassador (later Chargé d’Affaires) often sat at the negotiating table to ensure maximum transparency.”

It is understood that part of a US Embassy’s role is to assist and advocate for US business interests abroad through commercial diplomacy, and that it engages with respective governments on behalf of US businesses at their request, and that it did so in Malta for Steward Health Care.

Steward Health Care is a US company. It had taken over the concession to run three of Malta’s hospitals from Vitals Global Healthcare back in 2018. It runs the Gozo General Hospital, St Luke’s Hospital and Karin Grech Hospital.

The concession agreement with Vitals Global Healthcare had been a topic of controversy given it lacked experience in the healthcare field. The way the company exited the concession deal, and its apparent lack of investment had also raised eyebrows. Steward Health Care Malta then took over the deal, however controversy still remained. PN MP Adrian Delia had launched a court case arguing that the three hospitals ‘should be given back to the people’, and that both Vitals and Steward failed in their contractual obligations.

Meanwhile, the government and Steward Health Care Malta were negotiating changes to the original concession. Last October, Deputy Prime Minister Chris Fearne had said that discussions with Steward had not yet concluded, bud said that they were close. Fearne had said that Steward Health Care, early on, asked the government to see if they can revise certain concession clauses as the company believed they could provide a better service if there are some revisions. “We have no problem discussing with them, always in the context of Maltese and EU laws and procurement regulations. Negotiations have been ongoing for a year and a half, and it seems we are reaching the end of these discussions,” Fearne had said last October.

Now, however, the discussions seem to have stalled or outright ceased.


The negotiations

Steward Health Care Malta was asked about public statements that were made by its President, Nadine Delicata. “What of the renegotiations of the terms promised when Steward took on the fiasco left by VGH’s principals? Three times during the last three years, Steward has finalised negotiations with the government to agree to terms that would make the concession viable; three times the government has pulled out of signing at the very last minute,” She had said in an opinion article that appeared on the Times of Malta.

The company was asked by this newsroom for details about the terms it wants changed within the concession, and for information as to what happened to the latest round of negotiations.

In response, a spokesperson for Steward Health Care Malta slammed the terms of the original concession. “The original terms have been described by the Government of Malta itself, the European Commission, and the National Audit Office as: not based on correct information – the data provided on its cost structure was significantly inaccurate; grossly inadequate – the concession did not fit within PPP parameters as dictated by EU rules; and simply not fit for purpose."

The spokesperson said that the NAO’s second report on the concession agreement with VGH stated that, with the (current) original terms, “the concession remained an unimplementable project, an insurmountable challenge and irreparable situation for the Government to manage.”

“Any other concessionaire operating under these terms would be in the same position,” the Steward Malta spokesperson said.

“After the European Commission issued its findings to the government, and with knowledge that the data provided was incorrect, the administration at that time sought to rectify this issue by fixing the terms of the concession and making it a legal and viable entity. These negotiations and restructuring, which concluded in 2018, were focused on identifying the shortcomings of the current concession and bringing them in line with EU requirements, which would allow Steward to secure commercial financing as envisioned by the contracts. The negotiations were tough, but professional and productive. However, these terms were never signed following the change of leadership of the Maltese Government,” the spokesperson said.

“Had this first round of renegotiation been agreed to, there would be a viable concession in place that does not violate EU requirements for public-private partnerships (PPPs) and the hospital facilities would be nearing completion by now.”

Following this, there were two further attempts to fix the concession, the company spokesperson said. “During the subsequent two rounds of negotiations, Steward Health Care Malta believed it had reached an agreement with the Government of Malta, only for the administration to refuse to sign the terms at the last minute. In fact, Steward representatives and US Embassy representatives were invited to attend a signing, which was then cancelled without a good and convincing explanation. Throughout both rounds of the negotiation, the US Department of State and Department of Commerce were kept informed through the US Embassy in Malta, while the US Ambassador (later Chargé d’Affaires) often sat at the negotiating table to ensure maximum transparency,” the spokesperson said. “There are no negotiations currently ongoing and the concession terms remain below EU standards.”

No specifics as to the terms Steward would like to change in the concession agreement were given.

The Malta Independent sent questions to the Health Ministry, asking why the government had pulled out of signing an agreement with Steward in the last instance, and for information regarding the state of negotiations over the concession. No response was received by the time this newspaper went to print.

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