As a result of yesterday’s agreement, the Mater Dei Hospital will open on 1 July 2007, a beaming Prime Minister Lawrence Gonzi told the media at a hastily-convened press conference at Castille yesterday.

Agreement has also been reached on the total cost of the new hospital and also on penalties which will have to be paid if the targets are not met.

As part of the overall solution, elements of the project which were meant to be included in Phase 2 and 3 of the hospital plan, including the relocation of the Medical School and the transfer of parts of Boffa Hospital, have now been included, at no extra cost. Originally, they had to be done by 2010.

Dr Gonzi will now be reporting the whole deal to Cabinet tomorrow and will most probably make a statement in Parliament tomorrow evening. He is expected to furnish details about the whole deal, most importantly about the final cost of the hospital, one of the key points of the whole issue.

At another press conference held earlier yesterday, Dr Gonzi had referred to a Skanska estimate which spoke of the total cost of the hospital coming to Lm165 million.

According to government sources yesterday evening, the sum that had been agreed upon is “substantially less” than what Skanska was demanding but this Lm165 million sum did not include the cost of the medical equipment.

Dr Gonzi expressed satisfaction that an agreement had been reached and a date for the opening of the hospital agreed upon.

There are other tasks to be tackled now, he said. These include:

The medical equipment that has been purchased needs to be brought over, installed and tested.

The migration plan, which entails how each hospital section is going to move to Tal-Qroqq, needs to be agreed upon and planned in every detail.

The ongoing discussions on work practices also need to come to an agreement as regards implementation.

The negotiations had been long and difficult, Dr Gonzi said. Earlier he said that in 2002 former minister John Dalli and the Foundation for Medical Services had began to examine the Skanska claims and the cost overruns which were leading to ever higher bills.

By October 2003, expert Jackie Camilleri had drawn up a Gap Analysis Report, which is very detailed and which Dr Gonzi promised will be released along with other documents when he makes the statement in the House.

This found that some cost overruns were acceptable, as they had been authorised by government. Others were being contested by FMS and still others were doubtful.

Speaking before he met the Skanska delegation, Dr Gonzi did not reveal his hand. He said, however, that he was keeping all his options open, including that of sending the whole question for arbitration in Malta as the contract itself stated.

He was nevertheless optimistic that an agreement would be reached, as the gap between the two sides had narrowed considerably after his government had stopped all negotiations and Skanska kept coming up with one counter-proposal after another.

Speaking yesterday evening, Dr Gonzi said that although the target date is 1 July 2007, it may be that the actual migration will start beforehand.

Asked about the opposition of the sub-contractors, he said they were Skanska’s sub-contractors and they had to deal with Skanska not with the government. The previous Sunday he had warned them about thinking that they stood to do better if the agreement fell through and they dealt with government directly instead.

Sources said yesterday evening that Skanska still has a problem with one particular sub-contractor, but that, the sources emphasised, is Skanska’s problem.

Now that an agreement has been reached on all these issues, Dr Gonzi said, the role of FMS has changed since the risk of the cost is now in Skanska’s hands not in government’s.

Was this a throwback to the 1972 days of other Castille press conferences about brinkmanship talks with foreigners about money issues with agreement reached at the very last minute, Dr Gonzi was asked. “I don’t look back,” he replied smiling, “I prefer to look forward … to 2007.”