[WATCH] Malta opens legal proceedings against Skanska over faulty Mater Dei concrete

Malta will be launching a dispute resolution against Skanska

The government has commenced legal proceedings against Skanska, the main contractor of the construction of Mater Dei, over faulty concrete that was found across the hospital.

Health minister Chris Fearne told a press conference that the government has been legally advised by a London-based law firm to contest the validity of a waiver clause within a 2009 agreement between the Foundation of Medical Services (FMS) and Skanska that exonerated the latter from any liabilities, claims or disputes.

Fearne said that Skanska had recently rejected the government's calls for negotiations, citing the fact that the FMS had accepted the waiver's validity during a dispute over a water reservoir back in 2011. 

Read more: Skanska sub-contractors won’t speak up

"We are not accepting this stance, and have decided to go after Skanska," Fearne said. "We will put all possible arguments on the table to regain what is rightfully ours."

The government has therefore launched dispute resolution procedures against the Swedish firm in the Maltese courts, and will take the case to arbitration if a solution is not found.

The Maltese legal team will be led by the Attorney General, and will includes lawyers from Camilleri Preziosi and Sciberras & Lia Advocates. They will be advised by a London-based law firm, whose name Fearne refused to disclose so as “not to harm the government’s negotiating position”.

Nor would he say how much money the government was seeking from Skanska – repair works needed to fix the hospital’s structural deficits are estimated to rise to around €150 million.

Fearne said that the government has not excluded extending legal action to FMS officials who had signed off the waiver and to “the people who had given them the political go-ahead”.

In June last year, Prime Minister Joseph Muscat took talks to a political level with Swedish Prime Minister Stefan Löfvén, in a bid to avoid years of litigation and reach a settlement with the Swedish contractors.

Skanska was in 1995 granted a contract to construct Mater Dei, and the hospital opened its doors in June 2007. In 2009, a final contract was signed between the FMS and Skanska, that included a waiver clause, exonerating the latter – as well as architects, engineers, cement suppliers and logistical services companies – for faulty or defective works at the hospital.

At the time, the acting CEO of the FMS was Brian St John, who took up his post on September 2008 after leaving Lawrence Gonzi’s secretariat. He now serves as CEO to the Nationalist Party and was earlier today appointed chief of the PN’s corporate and business strategy.

In 2011, reservoirs at the hospital were found to have been built with low-grade concrete, but Skanska informed the FMS that it would not fork out the €200,000 necessary to repair them, citing the waiver clause.

Weak concrete was identified at the Accident and Emergency department in May 2014, and later– following a study by engineering firm Arup – across the entire hospital.