Waiver exonerated Skanska and Maltese partners on Mater Dei

Former social policy minister John Dalli confirms both sides reached overall agreement to wash out claims that were being put forward

It could be next to impossible for the government to recover any damages for the scandalous shortcomings in the quality of cement used in constructing Malta’s state-of-the-art Mater Dei Hospital which has been found to be severely deficient in safety.

At least €30 million will have to be spent to make the hospital safe, according to international consultants who spoke to the health ministry.

But the crux of the problem facing the government is that on 19 February, 2009, the Foundation for Medical Services signed away on a contract any claims or disputes that could be raised against Swedish construction giant Skanska – which built Mater Dei – as well as local and foreign architects and engineers, cement suppliers, and logistical service companies for faulty or defective works at the hospital.

An inside source who spoke to MaltaToday claimed that the exoneration by the Foundation for Medical Services effectively made it very difficult for the government to seek any compensation or to hold anyone responsible for negligence.

Details of the contract surfaced only now, coinciding with news of faulty cement quality at the hospital, that could have saved suppliers some €40 million.

Extracts of the contract have been seen by MaltaToday, and the most significant part includes the Waiver, which states: “Except as explicitly stated in this Project Closure Agreement, the parties will not be liable whatsoever for all and any further, past, present or future concerns, claims or disputes that the parties 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 except in relation to those rights explicitly stated in this Project Closure Agreement.”

The Project Closure Agreement defined specifically the claims that were being made by Skanska and the government.

No reference was made to the quality of the cement or concrete used at the hospital or to any other design and construction deficiency. 

Contacted by MaltaToday, former health minister John Dalli, who in 2009 was the minister politically responsible for the FMS, told MaltaToday that he couldn’t remember the details of the contract.

He however confirmed that the two sides had reached an overall agreement to wash out the claims that were being put forward.

“I remember that there were a lot of claims: from our end the government was complaining over the delays and there were fines which they had to pay; they also had some claims,” Dalli said.

“I don’t have the facts in hand but I think we had agreed on a fixed sum for the works on the hospital to go while the claims were washed out.”

Dalli added that the agreement had undergone the usual process where it was presented to Cabinet and approved.

Corroborating Dalli’s comments, former finance minister Tonio Fenech – who was responsible for the FMS prior to a change in portfolio – confirmed that issues had arisen between the two sides and were sorted out through the 2009 agreement.

In view of the technical report that confirmed structural damage at Mater Dei Hospital, Fenech said that no contract was above the Maltese law and responsibility still had to be shouldered by architects and contractors irrespective of any agreement that could have been reached.

He went on to add that any problems relating to concrete should have been identified in 1996 “when Alfred Sant had commissioned an architectural firm to test the concrete and a decision was then taken by Sant to increase the hospital’s floors”.

Seismic risk from weak concrete

The extract exonerating local and foreign companies from responsibility for any claim came as a shock to those investigating works at the public hospital that cost the Maltese taxpayer €600 million.

Effectively it could exonerate Skanska and its Maltese partners Blokrete and all other technical assistance or supplies from any design or construction defect.

Independent technical consultants ARUP this week confirmed that the Accident and Emergency Department was constructed with inferior quality cement.  

In some cases, they said that the cement work placed certain parts of the hospital in a very vulnerable status if certain seismic activities were to occur in the area.

The FMS contract with Skanksa had been signed off by architect Paul Camilleri on behalf of the Foundation for Medical Services (FMS) in 2009.

MaltaToday could not confirm what had led the government to instruct Camilleri to include this amendment in the contract, and whether this was a Cabinet decision to include the waiver.

At the time, the acting CEO of the FMS was Brian St John, who took up his post in September 2008 after leaving Lawrence Gonzi’s secretariat. He now serves as CEO to the Nationalist party. On his part, St John referred MaltaToday to former minister John Dalli when asked for his comment.

On Thursday, energy and health minister Konrad Mizzi said that concrete strength of the Accident and Emergency (A&E) and Block D buildings at Mater Dei Hospital were found to be “low and below specification”.  

A second inquiry into the civil and criminal liability of hospital engineers Skanska, of Sweden, will soon be finalised by retired judge Philip Sciberras.*

Arup’s inspection gave assurance that the A&E building was currently structurally sound to safely function on an ongoing operational basis.  Independent concrete core tests identified that the samples included both hard and softer limestone aggregate, with high porosity and high levels of carbonation.

“This was consistent with observed corrosion of reinforcing steel to columns in untreated undercroft zones,” Arup director Andrew Harrison said during a presentation of their findings at the Mater Dei auditorium. 

Harrison admitted that Mater Dei’s structural situation was incomparable to other hospitals he has seen.

“The extent of the problem at Mater Dei is surprising and disappointing,” Harrison said. “It is highly unusual for concrete strength issues to exist in hospitals in this day and age.” 

The hospital blocks were designed to have a concrete cube strength of 30 megapascals (MPa). Yet the A&E block was found to have a concrete strength of only 18 MPa, while that of Block D only hit 23 MPa. 

Block A (29 MPa) and Block B (27 MPa) fell narrowly below their specified strength, while Block C, Block E, the mortuary and the oncology hospital were on target. 

The impact of the “below-specification concrete” was assessed using a structural model of the building, to test the seismic resilience of the A&E building. Arup’s assessment highlighted that remedial measures were required to address performance under seismic conditions. 

Arup are currently finalising remedial designs for the A&E building and the requirements will shortly be issued for contractor/s to deliver the works. 

Remedial works will include reconfiguration of roof plant rooms to reduce loads together with new bracing, the introduction of additional shear walls to provide enhanced stability, concrete repairs to poor condition columns and verification of ties to the external façade. 

The remedial works design of Block D and the structural design assessment of Block F are ongoing. 

Arup has forecast that all remedial works will be completed by the end of 2016. 

Mater Dei’s structural problems were identified back in August last year, after government-appointed contractors were asked to carry out tests on the building’s columns and infrastructure. 

The tests were carried out as part of the government’s plan to build a floor above the A&E building, creating space for an additional 68 beds. Following the tests, the government identified a site across the road from the emergency department as an alternative for the new ward.

*The report has been amended as the inquiry has not yet been finalised at the time of writing of this report as previously stated.