Mater Dei administration dominated by irregular contracts in 2025, NAO finds

Millions of euros in services required to keep Mater Dei Hospital running continued to be procured through negotiated procedures  – another name for direct orders – in 2025, despite years of warnings over the hospital’s dependence on non-competitive procurement.

A new follow-up investigation by the National Audit Office found that of 15 engineering services whose contracts expired during 2025, under the remit of Minister Jo Etienne Abela, now removed – seven continued to be procured through direct orders as a stop-gap measure – while the government waited for new tenders to be awarded.

The NAO could not establish whether the same practice was being used by other sections of Mater Dei because the hospital only provided information relating to its engineering section.

The findings follow an earlier NAO investigation into procurement for non-medical equipment and facilities management at Malta’s main state hospital, which uncovered millions in contract extensions, backdated agreements and services procured without the necessary approvals.

One of the most significant cases involved mechanical, electrical, building and furniture maintenance.

A €10.6 million contract awarded in 2012 was originally intended to run for three years, with possible extensions taking it to a maximum of July 2017.

Instead, it was renewed four times until January 2021.

Extensions falling outside the original tender amounted to more than €14.6 million, while three one-year agreements with the same contractor were signed retrospectively.

The NAO had also questioned the use of “extreme urgency” arising from supposedly unforeseeable events to justify some extensions, pointing out that the services had been continuously required since 2012.

Similar practices were identified in landscaping.

An agreement commencing in 2015 was originally worth €294,000 for three years. Yet the same contractor continued providing the service through direct orders until at least July 2021, with payments reaching €573,533 by February that year.

At various stages the services were provided without agreements or the required approvals.

While the NAO found that these two services had finally been procured through public tenders by 2025, direct orders remain a feature of Mater Dei’s procurement.

A seven-year contract worth more than €8.3 million, excluding VAT, for upgrading and maintaining the hospital’s building management system was awarded to the existing provider through a direct order starting in June 2023.

The Department of Contracts authorised the deal on the basis of a lack of competition for technical reasons.

Auditors also found continuing weaknesses in the safeguards surrounding ongoing contracts.

Performance guarantees for two major maintenance contracts had expired and did not cover 2025, while no guarantee was available for the hospital’s pneumatic tube maintenance contract.

Mater Dei also failed to retain insurance documentation for four services during the year, despite this being specifically required in two contracts. Officials only sought some of the missing documentation from contractors in March 2026, four months after the NAO requested it and after its fieldwork was concluded.

A separate €21,835 direct order was also issued with Health Ministry approval but without the Finance Ministry authorisation required by procurement regulations.

The NAO classified progress on avoiding direct orders as “insignificant”, concluding that despite some improvement, long-standing problems involving documentation, guarantees and insurance policies continued to persist.

Gozitan Keith Attard was appointed Mater Dei Ceo by former Minister Jo Etienne Abela.