The Foundation for Medical Services had freed Swedish construction company Skanska from any future liability over the Mater Dei Hospital building in exchange for Skanska dropping more than €23 million in claims, Times of Malta has learnt.
At the time the settlement was seen as a victory for the FMS because it had managed to whittle down Skanska’s claims from some €30 million to €7 million.
However, the agreement may now make it more difficult for the government to reclaim the tens of millions of euros it needs to shore up the hospital’s structure, after it was recently discovered that the concrete used was inferior to required standards.
The government has demanded a meeting with Skanska, which oversaw the construction of the hospital, to find a solution to this problem.
The set-off between the foundation and Skanska was part of a “project closure” agreement signed on February 19, 2009.
Documents seen by Times of Malta show that the settlement was reached following lengthy negotiations, spanning several months, over a long list of claims raised by both sides.
The waiver clause reads: “The parties will not be liable whatsoever for all and any further past, present or future concerns, claims or disputes that the parties might have, or may have, in respect of the Amended Main Agreement and each party waives with binding effect all its rights in relation to the Amended Main Agreement [signed in 2005], except in relation to those rights explicitly stated in this Project Closure Agreement.”
Sources told this newspaper that the waiver was agreed on the basis that the building, completed in 2007, had been certified safe and in conformity with the expected standards.
However, it also specified that it would still be governed in accordance with the Laws of Malta. By law architects are liable for the safety of a building for a 15-year period after its completion and the obligation applies even in cases where both sides agree to waive any future liabilities.
It remains unclear, however, how the law might apply to Skanska, which was responsible for construction oversight of the project.
The documents show that the negotiations had started on December 17, 2008 between FMS president Paul Camilleri and Lars-Erik Alm from Skanska Malta Joint Venture, which incorporated Maltese construction company Blokrete Limited.
On December 26, 2008 the two sides reached a deal on the terms of the project closure agreement and expressed the wish to formalise a binding settlement. The FMS board gave its approval on January 15, 2009 and the terms of the settlement were signed by Mr Camilleri and Mr Alm on January 22.
As part of this agreement, Skanska Malta Joint Venture bound itself to carry out a list of works by not later than June 30, 2009.
These included the completion of fire stopping services, aesthetical fixing of ladders, and testing and operation of carbon monoxide system in various parts of the building.
Other works included modifications in the ventilation systems of the infectious diseases department.
A recent review on the hospital’s defective structures carried out by multinational company Arup found that remedial works will cost more than €30 million.