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Kurt Sansone
Much pomp accompanied the signing of the hospital contract in 2000 and the target date for completion was set for 1 June 2005 when the last wards in Block D had to be completed along with all external work in the hospital’s environs.
The contract, a copy of which is in MaltaToday’s hands, in 2000 stipulated a target completion value of Lm83.2 million but more recent estimates have put the cost for completion something in the range of Lm200 million. Unravelling the cause for such an inflated expenditure and the interminable delays is going to be a legal wrangle between government and Skanska over the interpretation of the various clauses, which define penalties for delay. Whatever happens, however, penalties for delay are capped at a maximum of Lm5 million.
Multiple postponements for the opening of Mater Dei hospital have not deterred the Foundation for Medical Services (FMS) from stating on its web site that the advantage of awarding a design and build contract, the likes of which was signed with Swedish consortium Skanska in 2000, is speed and control.
But after four years and still with no definite deadline for its completion, a cost that has caused former Prime Minister Eddie Fenech Adami to suffer heartburn and controversies that keep erupting from time to time, the project is anything but the epitome of speed and control. The unintended tongue in cheek statement on the FMS website jars with the reality that is the still-construction-site, Mater Dei.
The contract signed on 23 February 2000, seen by MaltaToday was supposed to put an end to the whole saga that unfolded in prior years and deliver a top notch general hospital to replace St Luke’s.
MaltaToday can reveal that the very same contract entered into between the Nationalist government and Skanska in 2000 had been rejected by the Labour government in 1997. After deciding to expand the new hospital into an acute general hospital - originally in 1994 the PN government wanted a smaller specialised research hospital - the then Labour administration wanted to separate the design and construction functions.
The Labour government had commissioned a British company to submit new designs for the hospital. These were completed by 1998 but after the change in government these were scrapped and Skanska were awarded both the design and construction contract.
Much pomp accompanied the signing of the contract in 2000 and the target date for completion was set for 1 June 2005 when the last wards in Block D had to be completed along with all external work in the hospital’s environs.
Today, a tour of the building site does not give the remotest indication that the whole hospital could become operational by June next year. Nobody knows when Mater Dei will start receiving its first patients and all the while the expenditure continues to rise.
The contract in 2000 stipulated a target completion value of Lm83.2 million but more recent estimates have put the cost for completion something in the range of Lm200 million. Unravelling the cause for such an inflated expenditure and the interminable delays is going to be a legal wrangle between government and Skanska over the interpretation of the various clauses, which define penalties for delay. Whatever happens, however, penalties for delay are capped at a maximum of Lm5 million.
Government was also bound by the contract to ensure a “positive cash flow to the contractor,” by agreeing to a schedule of monthly payments for the years 2000-2004. For this year government was to fork out Lm1 million a month.
In the latest instalment of this ongoing saga, it transpired that the committee set up by Prime Minister Lawrence Gonzi to re-evaluate the hospital contract and all expenditure items with Skanska, was injected with a heavy dose of nepotism.
In another rendition of what Alfred Sant describes as the ‘friends of friends’ network, the consultants appointed by Gonzi included two of his cousins and the audit firm where Parliamentary Secretary Tonio Fenech used to work with prior to assuming a junior cabinet post.
The committee included lawyer Richard Camilleri of MamoTCV and his brother, architect Paul Camilleri, who is also an FMS board member. The Camilleris are Gonzi’s cousins and another brother works for PricewaterhouseCoopers, the audit firm represented on the negotiating team by Michel Ganado. The firm’s contribution to the negotiations was related to project management.
The team also included two other consultants; Jacqueline Camilleri, who is a consultant to FMS and Englishman John Barr a senior civil engineer who has had consultancy work with the Freeport.
Despite already receiving remuneration for his services as an FMS board member, Paul Camilleri was paid at a rate of Lm43 per hour for services rendered to the negotiating team. Jacqueline Camilleri, who is paid for her consultancy services to FMS, was paid separately for her work on the negotiating team.
In Parliament this week, the Labour leader came down like a tonne of bricks on the choice of consultants casting doubts on the impartiality of Paul Camilleri and Jacqueline Camilleri, who as member and consultant respectively to FMS, were obliged to see that the project was running according to schedule.
According to a letter made public by the Labour leader, the negotiating team’s term had to come to an end on Friday. But 24 hours earlier, the Prime Minister announced the abrupt termination of negotiations with Skanska. The break down came after Skanska officials presented their counter proposals to the government side.
Now Gonzi says he is considering other alternatives. No details have yet been made public as to what led to the breakdown of talks and what government’s intentions are.
It seems that Skanska has reacted to Gonzi’s tough approach by presenting fresh counter proposals, but details are scant.
Terminating the contract with Skanska could draw government into a prolonged legal battle and probably further increase expenses. In that eventuality a new tender would have to be issued for the completion of works and that could only mean further delays.
Whatever government’s “alternatives” may be, one thing is clear: four years after the Labour Opposition had criticised the agreement signed with Skanska, the chickens have come home to roost and Gonzi is lumped with a legal conundrum and no hospital to regale the people with.
kurt@newsworksltd.com
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