Legal war erupts delaying further the opening of Paola hospital

The company tasked with building and equipping the Paola Southern Regional Health Hub project has asked the court to issue a warrant of prohibitory injunction against the health ministry and the Foundation for Medical Services (FMS), preventing them from entering or taking over the building.

The action followed Health Minister Joe Etienne Abela’s decision to issue a Termination Notice to Ergon Projects Ltd, the main building contractor of the delayed €40 million project, which was funded by the EU and should have been operating by 2022.

Ergon is a subsidiary of an Italian State entity, and the Italian government is objecting to the minister’s ‘heavy-handedness and mismanagement’.

The company teamed up with Technoline, among those listed in the magisterial inquiry on the hospitals scandal, including owner Ivan Vassallo. Assets have been frozen as they face criminal charges.

Court documents show that Ergon Technoline Joint Venture claimed the government owed them millions for work requested beyond the original contract’s terms, which the government refused to pay.

Recognising the delays in the project’s execution, the contractors claimed that these were mainly the fault of the Health Ministry, notably the Foundation for Medical Services and its project manager – a Greek company.

The Joint Venture claimed that when they won the contract in 2018, they found that the planning process, including the submitted designs, needed to be corrected, and a whole new process had to be followed to make fresh designs and obtain a new permit.

Ergon also claimed that the project managers changed a number of the parameters, deviating from the original contract. The companies involved added that while the changes were executed, the health authorities refused to recognise the additional work and issue related payments.

As a result, the contractors claim they are several millions out of pocket.

Ergon has now asked the court to issue a warrant against the health ministry to cease its contract termination notice and take over the building until a settlement is reached on what the contractor is to be paid.

This development is the latest in the Paola Hub saga, a project initially announced in 2017 and considered the brainchild of former health minister Chris Fearne while his campaign manager Carmen Ciantar was appointed head of the FMS.

Two years after the project’s deadline and with the Hub nowhere near operational, Health Minister Jo Etienne Abela announced earlier this month that he had issued a termination contract letter to Egron.

He made the announcement despite the minister taking a tour of the building with Prime Minister Robert Abela just before the European Parliament and local council elections, which gave the impression that the Hub was up and running.

The Shift is informed that the building is structurally complete. However, medical equipment, which Technoline had to supply through a separate contract, has not been delivered. According to Technoline, the equipment is already in Malta and its installation is awaiting the green light from the hospital’s project managers.

Technoline’s assets have been frozen by court order following conclusions of the involvment of the company and its owner in corruption in a deal that took over three of Malta’s public hospitals.

According to the  magisterial inquiry, Technoline’s real owners are Keith Schembri, the former OPM chief of staff, and the disgraced former Health Minister Konrad Mizzi. Both refuse the claims.

Due to a freezing order, Technoline appears to be having great difficulty delivering on its many government contracts, including the Paola Hub.