The government will take "all possible legal action" against Steward Healthcare if the company fails to honour its contractual obligations in the running of three state hospitals, Prime Minister Robert Abela said on Tuesday. 

"Our main message to Steward Healthcare is that they have contractual obligations which they must honour," he said.

"If Steward fails to observe its obligations, the government will take all the possible legal action."

On Sunday, MaltaToday reported that government discussions with Steward Healthcare over their concession are at an impasse because the government is refusing the US company's demands for higher payments. 

The government will also refuse to honour a €100 million penalty clause.

Asked on Tuesday whether the government will pay Steward €100 million if the courts revoke the hospitals contract, Abela was unclear.

"If Steward chooses to leave the concession agreement, the government will do its utmost to avoid paying that amount," he said.

However, he did not specify whether the government will do the same if the contract is revoked by the courts.

Steward took over the hospitals deal from the original concessionaires, Vital Global Healthcare, in 2018.

In August of 2019, former minister Konrad Mizzi had signed an agreement with Steward Healthcare which included a clause promising the American healthcare company a hefty €100 million payment if the contract is rescinded.

In February 2018, Adrian Delia filed a civil court case, seeking to repeal the 30-year contract the government signed in 2015 to privatise three state hospitals.

Testifying in court last year, Edward Scicluna said he did not know about the €100 million clause. 

Times of Malta last Sunday reported how Health Minister Chris Fearne clashed with Mizzi in 2019 after getting wind of backroom dealings to offer Steward Healthcare a more favourable deal.

On Tuesday, asked whether Mizzi had signed the agreement behind the government's back, Abela said: "The first time I got to know about that agreement was after it was signed."

At the time, Abela served in cabinet as an adviser to then Prime Minister Joseph Muscat, and on Tuesday he was asked what advice he had given Muscat on the Vitals deal.

"I wasn't involved in any of that," Abela said.