Issue link: https://maltatoday.uberflip.com/i/1431464
2 maltatoday | SUNDAY • 21 NOVEMBER 2021 NEWS THE big question in the Delia case on the hospitals conces- sion is why former minister Konrad Mizzi, now sacked from the Labour parliamentary group, inked a hushed-up side letter to the Steward agree- ment in 2019 to include the €100 million 'exit penalty'. MaltaToday revealed the ex- istence of the side letter in March 2020, showing how the Maltese government was ex- posed to a hefty bill should the concession ever be rescinded. The agreement was ham- mered out in August 2019 when Mizzi gave Steward an "escape clause", that turns any termination of its concession into a government default. The wording was 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". But the agreement laid down that should the hospitals' con- cession be terminated by a court of law – for whatever reason, and even if Steward is in breach of contract – such an event would be a government default. And that would mean that all debts incurred by Steward CONTINUED FROM PAGE 1 MaltaToday understands the government is now adamant to fight any claim from Steward to cough up a €100 million pen- alty – inked in near secrecy by former minister Konrad Miz- zi in the summer of 2019 as a side-letter to the original con- cession – should the concession for the Karin Grech, St Luke's and Gozo hospitals be termi- nated. "Steward can go to court, but the Maltese government will contest the €100 million pen- alty. Steward has to deliver the goods but the government will not an extra penny for that," the source said. The government would still be liable to pay Steward its equity and debt, representing the in- vestment it carried out in Malta throughout its tenure, should the concession be terminated. But with the negotiations still not achieving any result, it ap- pears unclear which side will move first to call out the other for Steward rescission case The Nationalist MP Adrian Delia, who as Opposition leader filed a case against the Maltese government as well as Steward Healthcare to request the re- scission of the hospitals' priva- tisation, thinks Steward's end- game is to make a bid for the €100 million penalty Konrad Mizzi inked in a 2019 side-let- ter. "They know they have a toxic contract... so all they can do to rake in the money is to either insist with the State to pay them more millions to run the hospi- tals, or take the €100 million penalty," Delia says. Delia says that while he sub- mitted documentary evidence that Steward has not upheld the concession's milestones, the company's response has been weak at best. "They did not even send a representative for me to cross-examine, and their photographic evidence of works done at the hospitals did not even come with, say, a hit-list of their accomplishments... since they are not rebutting what I'd describe as robust evidence against them, I ask myself: what are they doing to save their own skin?" But that endgame also pre- sents a conundrum for the Mal- tese government, which faces embarrassment over the mul- ti-million payout Steward could get from taxpayers' money. "Naturally I don't want the Maltese to have to pay out the liability," Delia says. "But I think my case is the basis on which to challenge Steward's expectation that a court decision rescinding the contract would automati- cally." A bullish Delia insists that Steward's own admission, in a case challenging Vitals Global Healtchare investor Ambrish Gupta's expectations of a €6 million payout, that the original concession was obtained fraud- ulently, means the hospitals privatisation contract has to be rescinded. "If the basis of the concession as it was awarded to Vitals and its secret backers was fraudu- lent, as Steward is now telling Gupta himself, then any instru- ment that came thereafter, like Mizzi's side-letter, cannot be upheld," Delia says. That would mean, the MP claims, that a court decision upholding his request would al- so attack Steward's claim for its €100 million payout. But that does not stop Steward from persisting in a court case against the Maltese govern- ment to claim damages from the court rescission. "I don't think they would win either," Delia claims. "The very fact that this same company has admitted that the concession was obtained fraudulently, just to counter the pretensions of Gupta, means they cannot be expected to win such a claim." Steward Malta told MaltaTo- day it had no comment to make on the claims by Adrian Delia. Delia has now extended his campaign with a judicial protest against the Prime Minister Rob- ert Abela, as well as Indis Malta, Bank of Valletta, the FIAU and the Commissioner of Police. "If Steward has said the conces- sion is fraudulent, then the PM has to stop the financing of the concession, the police and the FIAU should start investigating the fraud and BOV has to share all it knows of Steward's trans- actions with the police," Delia said. Steward Malta will be paid €24 million more in 2022, for a total of €69 million, as part of the Maltese government's obli- gations to the concessionaire to run the three state hospitals. mvella@mediatoday.com.mt Delia claims Steward's endgame is to have contract cancelled to claim €100m penalty "They did not even send a representative for me to cross-examine, and their photographic evidence of works done at the hospitals did not even come with, say, a hit-list of their accomplishments... since they are not rebutting what I'd describe as robust evidence against them, I ask myself: what are they doing to save their own skin?" Adrian Delia