As Dr Lawrence Gonzi explained in Parliament last Monday, the agreement stipulates a definite expenditure of Lm139 million for the construction of the hospital, which will be open on 1 July 2007.

If this does not happen, Skanska will be fined Lm1 million per month up to a maximum of Lm5 million. Through these negotiations, the government had saved Lm25 million from the original amount demanded by Skanska.

The DOI said the opposition leader had criticised the government for having the same contractor for the building and design of the hospital, instead of two separate contractors as a Labour government would done.

Past experience shows that having two contractors leads to differences. The facts show that Skanska had to take full responsibility for its actions and could not, as had happened under the Labour administration, demand more money because it said the contractor appointed by the government had not carried out its work well.

The leader of the opposition was also alleging that the control systems that had been used had created problems. The DOI said that if these controls had not been in place, the contractor would have been free to offer the quality he deemed fit and demand the price he

wanted.

The control system in place ensured that the hospital would be built to high quality international standards at a reasonable price, the DOI added.

Skanska are now bound to complete the project by a fixed date. The government had wanted the hospital to be ready before, but certain circumstances had not made this possible.

Among the matters the DOI mentioned was the fact that the Labour government had increased the capacity of the hospital from 480 to 1,000 beds, and had also changed the hospital from a specialist one to an acute general hospital.

More recently, a delay in the awarding of the tender for medical apparatus meant that several months had been “lost”.

The DOI said that the agreement reached with Skanska would result in a high quality hospital which would cost less.