‘Fraudulent’ private hospitals concession rescinded by Court

The concession of three hospitals to private operator Vitals, later passed on to Steward Health Care, has been declared null and void by a court, five years after then-Opposition Leader Adrian Delia took the case to court.

A “shadow team” has reportedly been ready to take over operations at Karin Grech, St Luke’s, and Gozo General Hospital since last summer.

The judgement, delivered today by Judge Francesco Depasquale, is scathing in its criticism towards both private operators as well as the Government officials involved, particularly former Minister Konrad Mizzi.

According to reports from the courtroom, Mr Justice Depasquale noted that the shareholders of Vitals had concluded a memorandum of understanding with the Government before any public call was made.

He reportedly also slammed Prime Minister Robert Abela and Attorney General Victoria Buttigieg for claiming they had no part in the deal. “It is as though they all were trying to escape responsibility,” he said.

Turning to the milestones the concessionaires were supposed to have achieved, he noted that none were fulfilled, reportedly describing them as a “laugh in the face”.

Government’s response

In a brief statement issued minutes after the sentence was handed down, Government said that it “is analysing this judgment, and in any eventuality will ensure the safeguarding of the national interest, the employment of all workers, and all the services that patients get from hospitals, which are merited by the concession for which the ruling was handed down.”

‘Cabinet’s decision’

Joseph Muscat, who was Prime Minister between 2013 and 2019 and was involved in the concession, took to Facebook after the ruling, stating that every decision about it was made by Cabinet as a whole. The statement can be understood as an attempt to deflect attention from his role in the process, and as a warning to Government, which includes a number of Ministers carried over from his administration.

He pointed out that the process of the concession also passed through legal scrutiny.

Dr Muscat also said that he hopes there will be more investigations into the agreement, “because I want all the facts to be known”.

“I always acted in the public interest, and those of good will know this.”

A tangled web

The hospitals concession has been mired in controversy from the start, and the tangled connections between those involved have only served to further complicate matters.

For example, Nadine Delicata, president of Steward Health Care Malta, previously served as VGH’s vice-president of operations, while Armin Ernst, Steward’s CEO, was formerly CEO of VGH.

While the VGH deal was brokered by Konrad Mizzi, the eventual sale of the concession to Steward was piloted by Keith Schembri. Both have been accused of a raft of financial crimes.

Meanwhile, former Prime Minister Joseph Muscat’s home and office (part of a ‘golden handshake’) were raided by police earlier this year over possible links to the deal, after he was found to have a monthly €15,000 contract for “economic services” from one of the firms links to the project, Switzerland-based Accutor AG.

Other head-scratchers include the takeover of medical appliances supplier Technoline by one of its managers, Ivan Vassallo, for €5 million, months before the company was granted a lucrative deal.

An investigation by The Shift found that Mr Vassallo was a front for offshore Jersey companies owned VGH’s owners.

Another company, Mtrace, was similarly bought by shady companies registered in Jersey, using income from the hospitals concession – but its shares were later transferred to Steward, raising further questions as to the ties between the two companies despite the public disassociation.

The complexities of the case mean that the several court cases related to it proceeded at a snail’s pace, although the public continued to fork out millions of euro a week to keep the whole operation running.

However, despite the concessionaire’s failure to abide by the original terms of the agreement (which, as per the above, it claims are unworkable), the Government cannot rescind the contract due to an agreement signed by former Minister Mizzi – without Cabinet’s approval – binding it to pay out a €100 million fine if the contract is rescinded, revoked, declared none, or otherwise cancelled, notwithstanding any illegalities found.

It remains unclear whether this fine will have to be paid following today’s judgement.