EU funding removed from €120 million Mater Dei direct order to avoid Brussels scrutiny

The government quietly removed EU funding from a controversial €120 million Mater Dei hospital project before handing it out through an unprecedented direct order to a joint venture led by Bonnici Brothers, a move sources insist was designed to avoid European procurement scrutiny.

The contract concerns the extension of Mater Dei Hospital’s emergency department and the construction of new mental health wards linked to the long-promised replacement of Mount Carmel Hospital.

Bonnici Brothers managing director, Gilbert Bonnici, was previously involved in private business ventures with Prime Minister Robert Abela.

The original tender for the project – CT2329/2024 – explicitly stated that around 80% of the work was expected to be financed through EU funds.

After the government scrapped the public tender and opted instead for a €120 million direct order, the EU funding component was dropped entirely and replaced with local financing.

Senior government sources said the move was approved by Finance Minister Clyde Caruana before being implemented by Director of Contracts Adrian Dalli.

The decision effectively removed the project from the stricter oversight and procurement obligations tied to EU-financed contracts.

Under EU procurement rules, projects of this scale financed through European funds are subject to enhanced transparency obligations and competitive tendering procedures. Procurement experts told The Shift that a direct order of this magnitude would likely never have survived scrutiny had EU financing remained attached to the project.

Questions sent by The Shift to Adrian Dalli asking why the EU funding element had been removed from the project and why the government had chosen not to issue a fresh public tender remained unanswered.

Dalli also declined to reply when asked whether he had discussed the controversial award directly with Prime Minister Robert Abela.

Finance Minister Clyde Caruana and Health Minister Jo Etienne Abela similarly failed to explain the rationale behind abandoning a competitive process for a project of such scale.

The move has raised suspicion that the rush to conclude one of the largest direct orders in Maltese history is connected to Labour’s ongoing multi-million-euro electoral campaign.

In a rather unusual situation, the original tender, issued in 2024, attracted only one bidder – CE-BB Projects Ltd, a joint venture between Bonnici Brothers and CE Installations. The company submitted an offer of approximately €136 million, substantially higher than the government’s original estimate of around €80 million.

Rather than continue negotiations through the public procurement process or issue a revised tender, the government abruptly cancelled the exercise altogether.

The Bonnici-led consortium subsequently filed an appeal before the Public Contracts Review Board, arguing that the government’s estimates were unrealistic and that the tender should not have been cancelled.

Yet while those proceedings remained pending, the government quietly opened negotiations with the same consortium for a direct award worth €120 million – €40 million above the project’s original projected value.

Government records continued listing the original tender as “under evaluation” even as negotiations over the direct order progressed behind closed doors.

Then, in an eleventh-hour manoeuvre last week, the Bonnici-led consortium abruptly withdrew its own appeal before the review board, removing the final legal obstacle preventing the government from signing the agreement.