MaltaToday previous editions

MALTATODAY 21 November 2021

Issue link: https://maltatoday.uberflip.com/i/1431464

Contents of this Issue

Navigation

Page 2 of 67

3 maltatoday | SUNDAY • 21 NOVEMBER 2021 NEWS The big mystery If nobody benefits, why did Mizzi forge €100m penalty for Steward? would be passed on to the government, with the Amer- ican company eligible for a €100 million contractual pay- out for its equity. Steward acquired the 30-year concession to run three state hospitals as a private con- cern in December 2017 from Vitals Global Healthcare, an unknown consortium of med- ical entrepreneurs granted the concession in 2015. But VGH racked up millions in debt with nothing to show for it, negotiating a buy-out of some €15 million from Steward. Later in 2018, Bank of Val- letta granted Steward a €5 million overdraft facility and a €3 million loan; but in Au- gust 2019, BOV also consent- ed to a loan of €22 million and another of €5.9 million to two Steward subsidiaries. Apart from placing the hospital lands under Stew- ard's control as guarantees for the debt, the agreement gave Steward unprecedented generosity by accepting that should the concession be re- scinded by any law, public order or decision, judgement or decree – effectively any government or court deci- sion – such an event will be "a non-rectifiable government of Malta event or default." Government insiders baulked at the agreement, claiming the loan facility and Mizzi's commitment to Stew- ard was unknown to Cabinet colleagues. The question indeed is: why did Mizzi do it? The 2019 agreement does not make sense because it gives govern- ment no wriggle room should Steward be found in breach of the concession by any tri- bunal – as in Delia's case. So a decision rescinding the deal will instantly trigger an obli- gation on government to pay out €100 million in cold cash, and take on any lenders' debt, such as these BOV loans. Certainly enough, Mizzi has been tight-lipped on the Stew- ard deal. In the Delia case, he refused to answer questions about the deal for fear of self-incrimination when he testified in court. He declined to answer a flurry of ques- tions with the stock phrase "I choose not to reply", given that he had not given full dis- closure in ongoing magisterial inquiries into the deal. Mizzi claims Cabinet was regularly updated in detail about developments, al- though various ministers dis- agree. The 2019 side letter, for example, was only discovered after a magisterial inquiry was kick-started into the hospi- tals' concession. The perma- nent secretary in Mizzi's tour- ism ministry, Ronald Mizzi, told the court in the Delia case that he was not involved in talks concerning the €100 million agreement and learnt of it through a Cabinet memo distributed the same month it was signed, in August. November 2019 negotiations Ironically, Steward was close to clinching wider berth on the contract in November 2019, but then former prime minister Joseph Muscat lost power in the wake of his chief of staff's resignation in connection with the Daphne Caruana Galizia murder in- vestigation. The concession already obliges the government to pay out €100 million cash should the government default on the concession: €100 million in cash and any lenders' debt incurred by Steward. Should Steward default and not fulfil its obligations on the St Luke's, Karin Grech, and Gozo hospitals, it would 'on- ly' lose its equity – the invest- ment it carried out through- out the concession – but government would still have to pay the debt they incurred. Together with Muscat, in November 2019 Steward was close to extending the grounds on which a 'force majeure' or national emergency default might incur, that is, situations where civil strife or war would make the operation unworka- ble. In such case, government would be obliged to pay Stew- ard 50% of its equity, but also cover any debt the company incurred. But Steward to add a host of other such 'force majeure' conditions, such as acciden- tal loss or damage, strikes and work-to-rule situations, and even changes in laws such as those affected by EU regula- tions all situations that tend to affect the ordinary running of any business. Thank you... for having bought this newspaper mt The good news is that we're not raising the price of our newspaper We know times are still hard, but we have pledged to keep giving our readers quality news they deserve, without making you pay more for it. So thank you, for making it your MaltaToday Support your favourite newspaper with a special offer on online PDF subscriptions. Visit bit.ly/2X9csmr or scan the QR code Subscriptions can be done online on agendabookshop.com Same-day delivery at €1 for orders up to 5 newspapers per address. Subscribe from €1.15 a week Same-day print delivery from Miller Distributors

Articles in this issue

Links on this page

Archives of this issue

view archives of MaltaToday previous editions - MALTATODAY 21 November 2021