Steward Malta made a pre-tax profit of €6 million in 2020, despite claiming that issues with the government hospitals contract rendered it of “no financial value”.
The American company, which took over the running of three public hospitals in 2018, has for years been insisting that the “unbankable” government contract needs to be completely renegotiated. However, Steward’s audited accounts for 2020 show the group turned a profit.
Steward’s predecessor, Vitals Global Healthcare, registered multi-million-euro losses during the two years it spent running the Gozo, St Luke’s and Karin Grech hospitals.
Steward said in a statement earlier this year that the fact that the “concession was considered ‘unbankable’, requiring capital infusions, and not fit for purpose by international institutions rendered the Maltese concession of no financial value”.
Questioned about this statement in light of the profit made by Steward, a spokesperson for Steward Malta said the 2020 financial results “are a reflection of the success of our integrated operating model amid the unparalleled challenges of fighting COVID-19”. The spokesperson said the improved financial results are a testament to “our abilities as a serious and successful operator to successfully drive an impressive turnaround”.
Steward said that upon its arrival in Malta in 2018, the concession was incurring heavy losses “that were not visible to the public, nor the government”. The spokesperson said Steward stands by its duty to transparency and financial accountability, and is dedicated to its patients, who remain the company’s primary priority.
Finance Minister Clyde Caruana last year accused Steward of failing to make the necessary investment to revamp the hospital facilities and services. The spokesperson, however, insisted that throughout 2020, Steward made investments in “people, facilities, equipment and supplies, including in-patient capacity and acquiring additional equipment.
Throughout 2020 Steward made investments in ‘people, facilities, equipment and supplies, including in-patient capacity and acquiring additional equipment’- Steward spokesperson
Stop blaming us – Tumuluri
Contacted by Times of Malta following Steward’s statement, a lawyer for former Vitals director Ram Tumuluri said the American operator knew what it was getting in to.
“Steward, having conducted its own full and thorough due diligence process, identified the concession as a viable opportunity based on the strong foundation and infrastructure already built by investor Ram Tumuluri and VGH’s hard work,” the lawyer said.
Tumuluri’s lawyer further pointed out that Steward made a “calculated and determined decision” to do whatever was necessary to take over the concession, including hiring senior management Vitals had already put in place.
Vitals then CEO Armin Ernst transitioned to Steward America, while Steward Malta’s current president is Nadine Delicata, who also held a senior management role with VGH.
Tumuluri’s lawyer said that Steward has now run the concession for longer than VGH did.
“To constantly attempt to blame and disparage VGH, who left the concession five years ago, is a distraction from the criticism Steward is facing for its own management of the concession. Steward’s focus should be on responding to those criticisms and delivering healthcare for the people of Malta,” the lawyer said on Tumuluri’s behalf.
Former Opposition leader Adrian Delia is seeking to annul the hospitals’ deal through a court case. Delia is arguing that the original concessionaire and its successor failed to fulfil contractual obligations on that deal and since important milestones had been missed, the hospitals were to be “given back to the people”.