Government halts talks on new hospital costings

The Prime Minister yesterday ordered that talks with Skanska on the costings leading to the completion of the Mater Dei Hospital be suspended forthwith after the company's latest counter-proposals were communicated to him.

Judging by the tone of an official statement in the evening, the government was not too pleased with what Skanska - which had signed a design and build contract with the Foundation for Medical Services in February 2000 - were suggesting.

"The government has a number of options before it and in the coming days a decision would be taken on the one that would be in the best national interest," the statement said.

But even as the talks were stopped, work on the Tal-Qroqq hospital - being carried out by Skanska - continues.

Negotiations between teams from the two parties have been ongoing for two months following a meeting between Prime Minister Lawrence Gonzi and senior Skanska officials. During the meeting Dr Gonzi had insisted on an explanation and a justification for the hike in the estimate the construction company presented to the FMS for the completion and opening of the hospital.

The government said the negotiations took place in the light of discrepancies between the estimates, the proposals and the values indicated in the original contract awarded to Skanska.

Earlier yesterday, a spokesman for the foundation explained to The Times that the FMS had initiated a detailed analysis of the costing of the new hospital last year, including the verification of all the prices. He said the final report was then passed on to the Finance Ministry for its perusal.

A number of meetings were held over the past two months with the government team being headed by the Parliamentary Secretary at the Finance Ministry Tonio Fenech.

The government said that although progress was registered during the meetings between the two negotiating teams this was not enough to lead to an agreement on all the issues the government wanted covered.

Over the past days, Opposition Leader Alfred Sant said the opposition had no confidence in the negotiations underway between Skanska and the negotiating team appointed by the government. The Department of Information stressed that the negotiations were not an investigation into how the FMS had operated.