Issue link: https://maltatoday.uberflip.com/i/1495215
4 maltatoday | SUNDAY • 19 MARCH 2023 NEWS CONTINUED FROM PAGE 1 Pace said the Prime Minister exaggerated the investments made by Steward, making them seem much more than what they actually were - ordinary upgrades that any clinic or hospital has to invest in over time. Justifying the unjustifiable The sentiment was shared by Medical Association of Malta President Martin Balzan, who said the Prime Minister "tried to justify the unjustifiable". "The Prime Minister should have just said that he will abide by the court decision and if need be boast about the good invest- ments done by government with EU funds in the Sir Anthony Ma- mo Oncology Hospital, the emer- gency wards at Mater Dei and the Paola Hub, and not about the in- vestments Steward did not do," Balzan said. The government spent €450 million on the Steward hospi- tals concession, Balzan insisted, to the detriment of other public investments it had promised and were never realised. "Steward were obliged to invest €200 million in new, modern infrastructure but this was not done and to add insult to inju- ry, the money government gave them sucked up the funds that could have gone to build the new outpatient block at Mater Dei and proper wards to ease over- crowding," Balzan said. He said that the Barts medical school that Steward built in Gozo was good and should be isolated from the concession agreement but this was not a hospital that benefitted patients. 'So, what?' Nurses' boss Paul Pace said the two ambulances, the dentistry unit and the Gozo hospital heli- copter mentioned by the Prime Minister were run of the mill ex- penditures and not the promised investment of millions of euros Steward had to make. "We did not bring in Steward for the day-to-day running of the hospitals but to invest millions in infrastructure by building a new hospital in Gozo, carry out sub- stantial refurbishment at Karin Grech and revamp St Luke's Hos- pital," Pace insisted, adding none of these major investments were carried out over the past eight years. He also took issue with the Prime Minister boasting about the 1,000 admissions Steward handled at Karin Grech Hospi- tal. "So, what? Karin Grech was already operational and St Vin- cent de Paul Home for the elderly has much more admissions than that." But Pace put his finger on an- other problem caused by the failed concession and which the Prime Minister ignored com- pletely. "There is an opportunity cost to Steward's failure to create beds at St Luke's and Gozo. The addi- tional beds there were supposed to alleviate the problems of over- crowding at Mater Dei Hospital. Unfortunately, today, we have canteens and stores at MDH being used as wards because we have nowhere to put patients," Pace said. He lamented that nurses had to work in the makeshift wards, he described as "hell-holes". "The Prime Minister should have called a spade, a spade with- out praising Steward when the promised investments never ma- terialised," Pace said. The hospitals saga Gozo General, St Luke's and Ka- rin Grech hospitals were granted on concession to Vitals Global Healthcare in 2015 after a dubi- ous tendering process. The National Audit Office had attributed collusion between the VGH investors and government officials, describing the conces- sion as a done deal despite a com- petitive tendering process. The private company had to invest more than €200 million to build a new hospital in Gozo and carry out extensive refur- bishments at St Luke's and Karin Grech with the aim of attracting medical tourism. Government would pay the company for a number of beds it would use as part of the public health service. However, VGH went bust, fail- ing to live up to its contractual obligations until the concession was sold to Steward in 2018. Steward also failed to live up to its contractual obligations, seek- ing to renegotiate the agreement. In 2019, an agreement signed by then minister Konrad Mizzi stipulated that Steward would be able to collect €100 million from government if the concession was terminated by the courts. The secret agreement came in the wake of an ongoing court case to rescind the contract, filed by Opposition MP Adrian Delia. The case was decided last month by Mr Justice Francesco Depasquale, who cancelled the agreement and ordered that the three hospitals be returned to the government. The judge attributed fraudulent intent to VGH and Steward and found shortcomings in the way public officials accepted condi- tions that were unfavourable to the government. Steward is appealing the ruling but in the meantime, has given notice of departure from Malta. Last Thursday, parliament held a special session to discuss an Opposition motion condemning the hospitals deal and obliging the government to sue Steward. The sitting ended in disarray with Opposition MPs walking off before the vote and Abela prom- ising to take legal action against Steward only after an investiga- tion by the National Audit Office. Abela tried 'justifying the unjustifiable' - Martin Balzan Paul Pace, MUMN Martin Balzan, MAM CONTINUED FROM PAGE 1 Sent towards the end of January 2018 by Steward CEO Armin Ernst, the email was addressed to investors Asad Ali and Shaukat Ali, and the gmail account of the prime minister's chief of staff Keith Schem- bri. Ernst complained of VGH's lack of coop- eration to secure the share transfer and pro- posed a short way out of the impasse to se- cure the arrangement as quickly as possible. "We (Steward) will assume a black hole of 'corporate' liabilities and are assuming that they will likely be around 3M Euro, but have no real way of ascertaining it due to a lack of supporting documents and we are running the risk of other liabilities coming out of the woods," Ernst wrote. He then added that if the deal is closed anyway, "we (Steward) are asking GOM (government of Malta) to protect us from liabilities exceeding 3M". Ernst also suggested withholding "part of the initial €2.5 million payment" to Ram Tumuluri, the VGH CEO until all issues were settled. Significantly and paradoxically, Ernst de- scribed the hospitals concession as "prob- ably the messiest situation" he had seen in his professional lifetime. Ernst was Steward CEO at that point in time but he was no stranger to VGH having been appointed their top officer in Novem- ber 2016 when the company announced senior management appointments. Ernst remained VGH CEO until August 2017 before resigning and moving back to Steward, where he had originally worked. In a telling sign off to the email, Ernst made it clear who was calling the real shots on the hospitals concession from the gov- ernment side. He ended the email with a specific reference to Keith Schembri, in- forming him that Health Minister Chris Fearne was running after him for an update. "Keith: Chris has called me asking for an update. Haven't said anything, but need to get back to him," Ernst wrote. Fearne had testified in the court case that despite being health minister, he was kept in the dark on all contractual arrangements between government and VGH, later Stew- ard, since these were tasked specifically to Konrad Mizzi. Just a month after Ernst sent this email, Steward officially took over the running of St Luke's, Gozo General and Karin Grech hospitals after becoming the major shareholder in Vitals Global Healthcare (VGH). The company name was eventually changed to reflect the new owners. Steward CEO said hospitals deal was "probably the messiest situation" he had seen in his career