Issue link: https://maltatoday.uberflip.com/i/1259447
5 maltatoday | SUNDAY • 14 JUNE 2020 NEWS MATTHEW VELLA STEWARD Health Care chair- man and CEO Ralph de la Torre will be meeting Maltese prime minister Robert Abela, after the American healthcare giant was sold by former asset group Cerberus Capital to a doctor-led group. Together with Steward Mal- ta president Armin Ernst, who runs the international arm of the private hospital group, dis- cussions will focus on the fu- ture of a controversial conces- sion of three state hospitals to Steward. A majority of Cabinet mem- bers are believed to have strong reservations about using tax- payers money to finance the American company's conces- sion, a project driven by the former prime minister Joseph Muscat and one-time energy and health minister Konrad Mizzi. But the 30-year concession to run three state hospitals, grant- ed to a mysterious group of in- vestors under the name of Vi- tals Global Healthcare in 2015, ran aground when the compa- ny sold its concession for a re- ported €15 million to Steward. Now the Maltese government is seeking ways to renegotiate the concession with Steward, that includes fronting the an- nual healthcare cost for hospi- tal staff and medications. Risky default clause With a magisterial inquiry underway into the controver- sial public-private partnership, the government is risking a hefty bill should the concession ever be rescinded. An agreement hammered out in August 2019 with former tourism minister Konrad Miz- zi gave Steward Healthcare an "escape clause", that turns any termination of its concession into a government default. The wording is part of an agreement in which the gov- ernment acknowledged a €28 million loan from Bank of Val- letta to Steward as "lender's debt". In the agreement signed by Mizzi and Steward, the gov- ernment agreed that should the hospitals' concession be terminated by a court of law – for whatever reason, and even if Steward is in breach of con- tract – such an event would be a government default. That would mean that all debts incurred by Steward would be passed on to the gov- ernment, and the American company would still be liable for a €100 million contractual pay-out for its equity. The American healthcare company was already on the verge of being given wider berth on its concession back in November 2019, before former prime minister Joseph Muscat lost control of power in the wake of his chief of staff's resig- nation with the arrest of Tu- mas magnate Yorgen Fenech, his secret business partner. The original concession itself obliges the Maltese taxpayer to pay hefty penalties should the government decide sin- gle-handedly to terminate the concession: €100 million in cash and any lenders' debt in- curred by Steward. But should Steward default on the contract and not fulfil its obligations on the St Luke's, Karin Grech, and Gozo hospi- tals, it would 'only' lose its eq- uity – the investment it carried out in the hospitals. Govern- ment would still have to pay all the debt incurred throughout. With Muscat, in November 2019 Steward wanted to extend the grounds on which a 'force majeure' or national emergen- cy default might incur, that is, situations where civil strife or war would make the operation unworkable. In such case, gov- ernment would be obliged to pay Steward 50% of its equi- ty, but also cover any debt the company incurred. But Steward wanted to add a host of other such 'force ma- jeure' conditions, not necessar- ily as calamitous as a warlike event, such as accidental loss or damage, strikes and work- to-rule situations, and even ordinary changes in laws or EU rules. Only last month, Cerberus Capital Management sold Steward Health Care System to a management group of Stew- ard physicians led by the com- pany's CEO and founder Ralph de la Torre. Medical Properties Trust will maintain its 10% stake. mvella@mediatoday.com.mt Steward founder for Malta talks Steward Health Care founder and CEO Ralph de la Torre to meet PM to discuss way forward for private hospital group's control of state hospitals HAVE YOUR SAY OPEN PUBLIC CONSULTATION Amendment to the Development Notification Order PLANNING AUTHORITY The Planning Authority is proposing to add a new category class to the Development Notification Order (DNO). The class will cover development carried out by and on land which falls under the operational control of the Civil Protection Department. DNO applications are for any proposed developments which do not have an adverse impact on neighbouring residences. There are currently 22 category classes of permitted development. The proposed legal notice which will enable these changes, may be viewed on the Planning Authority's website www.pa.org.mt/consultation Individuals and organisations are invited to send their representation related to the proposed changes in writing through email address: dno@pa.org.mt by not later than Wednesday 17th June 2020. www.pa.org.mt Steward founder and CEO Ralph de la Torre shakes hands with Steward Malta staff during a previous visit in which he held talks with former prime minister Joseph Muscat. Steward Malta CEO Armin Ernst (centre) looks on