Paul Camilleri, former president of the Foundation for Medical Services responsible for the building of Mater Dei Hospital, said today that the waiver in the contract with Skanska only applied for controversies "which the parties had in view".

He said any deficiency in the quality and grade of concrete used at Mater Dei Hospital was never brought to the attention of the board before the agreement for the completion of the project was signed.

The agreement is the subject of controversy following the discovery of weak concrete and the disclosure that the contract included a waiver over future issues.

In his statement, Mr Camilleri said:

"As the former president of FMS and signatory on behalf of FMS of the Project Closure Agreement, the need is felt to set the record straight on a number of salient points, namely:

1. At no point in time prior to the signature of the Project Closure Agreement was any deficiency in the quality and grade of concrete used at Mater Dei Hospital brought to the attention of the FMS board;

"2. If any deficiency in the quality and grade of concrete used had been detected and communicated to the FMS board, it would have been raised in its claims against Skanska, as FMS did and addressed accordingly with regards to any other claim that resulted and was brought to its attention;

"3. Following the inauguration of Mater Dei Hospital in 2007, Skanska raised a number of claims against FMS amounting to approximately Lm12,000,000 (€ 28,000,000) whilst FMS raised a number of claims against Skanska for works not done according to the Main Agreement that had been entered into;

"4. The respective claims of each party were discussed at a Decision Group which met in December 2008. Given that the Decision Group failed to resolve the parties’ respective claims, the claims were referred to without prejudice settlement negotiations;

"5. On the 15th January 2009, the FMS board approved detailed terms of a proposed settlement;

"6. The next stage was for the lawyers to draft and finalise a settlement agreement. FMS was legally assisted by a reputable law firm;

"7. The final settlement agreement, entitled the Project Closure Agreement, was signed by FMS and Skanska on the 19th February 2009. Like all agreements, the Project Closure Agreement needs to be read in its entirety and within its full context and not by taking individual clauses in isolation and out of context;

"8. Questions have been raised in the media as to whether the Project Closure Agreement prejudices FMS’ rights against Skanska in the light of the reported recent findings by Arup on the quality and grade of concrete used at Mater Dei hospital;

"9. FMS was advised by its lawyers at the time of negotiations of the Project Closure Agreement that its concerns on retaining the 15 year contractor liability and the liability for hidden and latent defects are protected by the wording in clause 5.1 of the Project Closure Agreement in terms of which: “The Works … are deemed to be completed and accepted in accordance with the Amended Main Agreement saving any rights FMS and SMJV may have under Maltese law….”;

"10. Indeed, and in any event, Article 1725 and 1726 of the Civil Code provide that a compromise shall not extent beyond the subject-matter of a contract and shall only settle the controversies which the parties had in view.

"11. As a result of the negotiations undertaken by FMS and the conclusion of the Project Closure Agreement, moreover Skanska ceded most of its claims which had amounted to approximately Lm12,000,000 (€ 28,000,000) save for approximately Lm 2,000,000 (€ 4,700,000) which was accepted by FMS as representing justified additional works;

"12. All the above points, including the required communications, are adequately documented."

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