As accusations continue to fly over the issue of responsibility for the faulty concrete supplied to Mater Dei Hospital, which will cost an estimated €35 million to rectify, and a supposed blanket waiver of liability given to Skanska Malta, this newspaper is informed that the Foundation for Medical Services had never 'waived' any request for reimbursement from Skanska Malta on the basis of the Project Closure Agreement signed between the two parties.

It is being claimed that Skanska Malta had refused to pay €200,000 in damages to the Foundation for Medical Services (FMS) because of faults in reservoirs underneath Mater Dei Hospital, on the basis of a so-called 'blanket waiver' that the FMS had conceded to Skanska Malta.

This, however, could not be further from the truth, according to well-placed sources speaking with this newspaper.

In actual fact, the FMS had never claimed €200,000 in reparations from Skanska Malta in the first place.  The €200,000, known as 'retention money', actually represented the final payment that the FMS had owed Skanska for its services at Mater Dei Hospital.

When the issue of the leaking reservoirs at Mater Dei cropped up, the FMS had withheld that payment until the reservoir issue was resolved.

Speaking with this newspaper, sources close to the issue have made it perfectly clear that at no point did the so-called blanket waiver, itself a complete misnomer, have any bearing on the final €200,000 payment delivered to Skanska Malta, as contracted.

In actual fact, the problem, as identified by the FMS' legal experts at the time, was that Skanska Malta had not been responsible for the construction of the reservoirs. That task had predated Skanska's taking over of the project by some four years, and as such it was not Skanska Malta that had been responsible for the problem.

The reservoirs had not been designed by Skanska but, rather, by Ortesa Spa in 1996 - back when the hospital project was still known as the San Raffaele Hospital. Skanska took responsibility for the project in 2000 when Skanska Malta and the FMS entered into an agreement for the building, finishing and commissioning of the new hospital in Tal-Qroqq.

When the reservoir issue cropped up, the final €200,000 payment due to Skanska was temporarily withheld until the FMS received legal advice to the effect that it would be very difficult to withhold that final payment to Skanska over work that it had not been responsible for in the first place, irrespective of the fact that Skanska representatives had attempted to invoke Article 9.1 of the Project Closure Agreement in their correspondence with the FMS.

In fact, the Project Closure Agreement on the construction of Mater Dei Hospital signed between the FMS and Skanska Malta clearly stipulates that the government still has legal channels available through which it will be able to claim damages from Skanska over the low quality concrete used in parts of the hospital, which the government says will cost some €35 million to rectify, irrespective of what is stated in Article 9.1.

As reported by this newspaper last week, Article 9 opens and closes with the clause "except in relation to those rights explicitly stated in this Project Closure Agreement", a clear reference to the agreement's Article 5, which provides safeguards under Maltese law by stipulating: "The works...are deemed to be completed and accepted in accordance with the Amended Main Agreement, saving any rights FMS and SMJV may have under Maltese law."

As such, a 'waiver' exonerating Skanska from all liability does not, in actual fact, exist, and the government will be able to initiate civil and possibly criminal proceedings against Skanska in relation to the substandard concrete used in the construction of the hospital.

In emails between former FMS CEO Brian St John and former FMS President Paul Camilleri published by the media, as part of an article claiming that the Project Closure Agreement prevented the FMS from holding Skanska Malta fiscally responsible for the leaking reservoirs, only selected passages were highlighted.

The salient passage of that email, where Mr St John explains the problem with holding back on the final payment to Skanska Malta over the reservoir issue, reads: "... it is pertinent to point out that the underground potable water holding tanks were constructed under the supervision of Ortesa in February 1996, i.e. 15 years ago. It would be reasonable to assume that the absence of maintenance activity over a 15-year period would have been the root cause of this occurrence.

"The FMS, however, sought legal advice regarding this situation and legal counsel concluded that pursuing the line of attempting SMJV [Skanska Malta] to resolve the problem was not a recommended way forward. Moreover, withholding monies contemplated in the Project Closure Agreement, in the light of all the outstanding work having been delivered, would be in breach of the same agreement."

The work delivered refers to a number of relatively minor issues, none of which had anything to do with the use of concrete or the reservoirs themselves.

Also see: www.independent.com.mt/articles/2015-05-30/local-news/Mater-Dei-agreement-no-waiver-exonerating-Skanska-over-faulty-concrete-6736136470