Health Minister Chris Fearne indicated in parliament on Tuesday that the government will seek compensation from Steward Health Care in the wake of the collapse of the hospitals concession.

Fearne also announced proposals for the rehabilitation of parts of St Luke's Hospital for medical use.

The minister was concluding an unplanned debate on the report by the  National Audit Office, issued on Monday, into the transfer of the hospitals concession from Vitals to Steward Healthcare.

Defending himself from various accusations made by the Opposition, Fearne pointed out that the Auditor General's report, as well as two previous ones, were the result of a request for investigation which he himself had made back in December 2016, soon after becoming health minister. 

At the time the Nationalist Party had said that his request was "a gimmick" and lacked substance.

Health Ministry was sidelined

The auditor's report confirmed what had been known for years, he said - that he and the health ministry were sidelined from all significant aspects of the negotiation of the concession agreement. 

However, in discussing the situation now, two important points needed to be considered.

The first was that on April 5 the government took over the running of Gozo Hospital, Karin Grech Hospital and St Luke's Hospital, previously run by Steward Health Care.

Secondly, the forum where one could seek his interests from the other party in matters such as this, including seeking compensation, damages and penalties, was international arbitration, and this process had started before the International Chamber of Commerce.

Fearne said he could not speak in detail about proceedings there, other than saying the government had won the first, procedural round.

The audit report did not make pleasant reading for parts of the government, Fearne said, but he was pleased to note that where the health ministry was actually involved - in monitoring health services and standards, the auditor was full of praise. 

Additional payment to Steward

Referring to the payment of an additional €25 million to Steward in 2021, which was criticised by the Opposition earlier in the debate, Fearne said that for several years the Health Ministry resisted payments demanded by Steward in terms of arrangements made behind its back and without Cabinet approval.

Unfortunately, the State Advocate had told the Cabinet that an agreement made, even without the Cabinet's approval or the Health Ministry's knowledge, still had to be honoured. 

The ministry had also not known of the €100 million penalty agreed with Steward should the concession agreement been terminated, he said, echoing an NAO conclusion that the minister responsible for the concession, Konrad Mizzi, had "misled" cabinet about that. 

After January 2020 when termination was being muted, Steward came out with "that joker", Fearne said. 

"That was the first time that I and the prime minister got to know about it and it stopped us from going ahead with termination, as we would have been penalised with the €100 million," Fearne said.

It was 'thanks' to the court case instituted by Adrian Delia that the deadlock was broken as the court annulled the concession agreement. That decision was still not in force, in that it had been appealed by Steward, but a day after submitting the appeal Steward announced its termination of the deal.

With the government having taken over the hospitals on April 5, arrangements were proceeding smoothly for the transfer of all former Steward workers to the public service as well as the transfer of contracts, and a tender would be issued soon for a new top-of-the-range MRI machine at the Gozo hospital, Fearne said.

Concluding, the minister said the government while recognising its mistakes, remained committed to providing the best health service to the people.