Three reports outlining problems with the construction of Mater Dei Hospital prior to the 1996 election were ignored by the health authorities, an inquiry has found.

The reports included a confidential memo sent in September of that year to then health minister Louis Galea, who was president of the Foundation for Medical and Social Services responsible for the project.

Two other former Nationalist Cabinet members, John Rizzo Naudi and Antoine Mifsud Bonnici, also sat on the board of the FMSS and were privy to the reports.

Taking note of the three Cabinet members on the foundation’s board, the inquiry, headed by retired judge Philip Sciberras, said it would be “naive” to consider that the government “did not know or could not have known of the dire state that the project was in”.

The confidential memo, penned by architect Vince Cassar, warned of problems that could arise in the future, including “rampant” maintenance costs.

When contacted yesterday, Mr Cassar said it had been evident at face value that there were problems even of a design nature. He did not conduct any tests on the concrete at the time. He said that in 1997, when the incoming Labour government changed the scope of the building from a research hospital to an acute general hospital, the advice that it was possible to build two additional floors was given on the premise that structural works were done as recommended in the designs.

It is not acceptable that Ortesa make these observations nine months after the commencement of works. Where have Ortesa been these last nine months?

But further changes to the project took place in 1998, when the Nationalist Party returned to power, entering into a “cost plus” agreement with Skanska, the Swedish construction company that saw them also take on responsibility for designs.

The 98-page inquiry report points towards defects that came to light by July of 1996, just nine months after the hospital at Tal-Qroqq, then known as San Raffaele, started to be built.

But the warnings were ignored by the project managers and politicians in charge of what, many years later, turned out to be a very costly hospital.

The inquiry noted the damning testimony of architect Albert Cauchi, who alleged political interference – pointing the finger at former finance minister John Dalli – for the inclusion of subcontractors he described as “cowboys”.

However, Mr Cauchi’s testimony was overshadowed by claims that he may have had a chip on his shoulder for not being appointed project manager.

But the inquiry also noted that independent of Mr Cauchi’s testimony, by July of 1996 there was “enough documentary evidence, which, under normal circumstances, should have cajoled FMSS into action” to ensure the integrity of the project.

Of particular note is the project manager’s response to the July letter sent by the Italian architectural firm Ortesa, responsible for the hospital designs, detailing bad workmanship. The project manager answered back: “Whilst we appreciate Ortesa’s advice on the quality of works... it is not acceptable that Ortesa make these observations nine months after the commencement of works. Where have Ortesa been these last nine months?”

The inquiry was initiated last year after preliminary tests on concrete columns found the structure to be weak and below the strength required for such a building. The tests were done on columns at the accident and emergency department, where two additional floors were meant to be built.

Further tests confirmed that low-grade concrete had also been used in other areas of the hospital and remedial work is expected to cost some €30 million.

The hospital should have made use of grade 30 concrete, but in various areas columns were found to be built using grade 18 concrete, which is normally used to construct pavements.

Salient questions

What is the period under scrutiny?

The defective concrete in the columns at the accident and emergency department were built in the first half of 1996. Works started in February and continued until May.

Who supplied the concrete?

The inquiry said: “It seems most concrete placed in columns was provided by Mixer Ltd, even if other suppliers, including Magħtab Construction Ltd, Blokrete Ltd and Devlands Ltd, provided concrete and concrete based materials to the site.”

Mixer Ltd is owned by Bastjan Dalli, former PN minister John Dalli’s brother. It became a concrete supplier in January 1996, even though the consortium chosen to build the hospital included companies that could supply concrete themselves.

Were tests done on the concrete?

Yes. The inquiry noted four tests that were done between February and May 1996 on concrete supplied by Mixer Ltd. All results showed that the concrete satisfied the requirements.

But the inquiry said the results, which were part of the documentation kept by the Foundation for Medical Services, indicated that concrete samples met specifications at time of testing and not necessarily at moment of casting.

What the inquiry says about...

Skanska

“It was ultimately the responsibility of the contractor [Skanska] to ensure in good faith its complete compliance with and adherence to its assumed contractual obligations and responsibilities... The board feels that it is shameful how a contractor of international renown, fame and stature such as Skanska International could default so comprehensively in its quality assurance and oversight, and possibly participated in fraudulent activity.”

The government

“Moreover the client himself, that is FMSS and ultimately the government, also failed by omission, if not by commission, by failing to intervene when faced with the growing problems and concerns afflicting the project.”

Louis Galea’s testimony: from categorical denial to vague memory

Former minister Louis Galea initially “categorically” denied ever having knowledge of bad workmanship when testifying in the inquiry.

However, when confronted with the two reports drawn up by Bovis in June 1996 and Ortesa in July, Dr Galea said he had “a vague memory” of them but could not recall discussing them.

Minutes from the board meetings of the Foundation for Medical and Social Services, which Dr Galea chaired, showed that the reports had been discussed.

But Dr Galea suggested that the issues raised by the reports must have been dealt with by the project management office. Dr Galea recalled architect Vince Cassar’s engagement and his confidential report in September 1996 – a month before the election – because by that time the situation had reached a stage where a decision had to be taken about the project designers.

Ortesa, an Italian architectural firm, was entrusted with the hospital designs after being chosen by the Italian partners in the San Raffaele project. However, serious problems arose over incomplete designs, which were creating problems for the construction company.

Dr Galea told the inquiry the government was seriously considering terminating the role of Ortesa in the project but the board could not find any corroborating evidence for such a decision.

Waiving responsibility for 2011 problems

Just two years after agreeing to a controversial waiver clause, Skanska used it to shun responsibility for structural defects that developed in reservoirs.

The reservoirs close to the hospital blocks where weak concrete was found had developed structural problems as a result of low quality concrete.

The Foundation for Medical Services was aware that the concrete for the reservoirs was cast in February 1996, when the base and first two floors of Block D were constructed.

The inquiry said it was “inexplicable and totally inexcusable” that FMS failed in 2011 to raise further concerns regarding the integrity of the remainder of the construction.

“When Skanska JV was confronted with those findings it immediately made recourse to Clause 9 [waiver clause] of the Project Closure Agreement and found no legal challenge from the FMS,” the inquiry said.

Even the final balance of €200,000, which FMS retained in view of the findings, was released to Skanska in November of that same year at the behest of CEO Brian St John, the inquiry added.

The 1996 warning signs

Project Audit Report by Bovis Europe – July 8

“Quality standards and control do not appear to meet the requirements of such an important project. For example, whilst the general standard of concrete surface finish on vertical surfaces and soffits is good, bad practices in concrete placing have been noted which could lead to durability problems.”

Letter by Ortesa to project management office after site visit – July 11

“...[Q]uality of works totally insufficient and not acceptable in many areas.” The letter was accompanied by various photos that were evidence, according to Ortesa, of poor quality of reinforced concrete work and compaction.

Confidential report by architect Vince Cassar for Minister Louis Galea – September 9, 1996

Mr Cassar warned that if the designs drawn up by Ortesa were retained: “...besides giving rise to further innumerable requests for information, claims for extension of time and extra costs, could result in having a building not a hospital – with a number of services thrown in, with problems at commissioning stage – assuming that commissioning can be done – and thereafter with rampant maintenance problems.”

Albert Cauchi’s testimony

“Yes, yes, at some point he [Bastjan Dalli and Mixer Ltd] joined [the project] but to be quite honest I did not know him... politics entered the picture. I am sorry to say that politics entered the fray. Because you could realise this from the type of contractors engaged. Who put them there. And then Minister [John] Dalli became in charge of the cost, plus he was everything. All the subcontractors came from him.”

John Dalli’s testimony

“I never interfered in the [hospital] contract’s operations; in operations as such I never got involved... [If Bovis] said in their report there were deficiencies I would not have gone to verify matters myself, I would have passed it on to people.

“When asked about the 1998 memorandum of understanding that led to the design and build cost plus agreement, Mr Dalli said: “It would have been FMS that negotiated such a contract... Cost plus I do not think would have been done without Cabinet approval.”

kurt.sansone@timesofmalta.com