The Malta Independent 20 May 2024, Monday
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Steward Health Care Malta terminates concession agreement with government

Thursday, 16 March 2023, 10:00 Last update: about 2 years ago

Steward Health Care Malta (SHCM) said Thursday it has given notice to the government to terminate the Services Concession Agreement and related contractual framework following what it described as "breaches of commercial agreements". The concession agreement included the management and operation of St Luke’s, Karin Grech and Gozo General hospitals and the Barts Medical School, Steward said, without giving a timeline.

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The company’s priority remains the wellbeing and treatment of its patients and the welfare of its staff, the company said in a statement. SHCM said it will ensure that 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.

The decision comes in the wake of the annulment in February by a Maltese court of the concession agreement, wit Mr Justice Francesco Depasquale ruling that three hospitals that were being managed by Steward Health Care are to be returned to government control. The three hospitals in question are St Luke's, Karin Grech and the Gozo General Hospital.

The case had been filed by PN MP Adrian Delia when he was Opposition Leader in 2018. Delia had argued that Vitals Global Healthcare, and their heirs in title Steward Healthcare, had not fulfilled the contractual obligations tied to the deal. The court nullified the contracts awarded in a damning ruling which read that the concessionaires acted "fraudulently."

On Wednesday, Steward Health Care Malta (SHCM) filed an appeal against the Maltese Civil Court judgement on the hospitals' concession agreement and requested a European Court of Justice (ECJ) Preliminary Ruling.

In its statement Thursday, SHCM and its parent company, Steward Health Care International (SHCI), said they have operated at all times in accordance with the highest professional standards and values, including a desire for good governance and transparency.

The company added it is disappointed at the Government of Malta’s failure throughout this engagement to keep faith with the spirit of the public-private partnership agreement. Specifically, the government failed to be accountable for their own liabilities, which had escaped scrutiny; 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.

More broadly, SHCI said it 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. More recently, the 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 failings, Steward said.

SHCM noted that it kept the US Embassy and State Department – which was on several occasions present at negotiations on the concession terms – fully informed of all relevant events and engagements with the Government of Malta.

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, the company said.

SHCI added it will continue its mission to pioneer an effective, patient-first approach that unlocks access to high-quality, coordinated, and affordable care for communities around the world.

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