The government must pay the Ergon-Technoline consortium €1.8m in costs, an arbitration board decided in the latest twist to the saga of the long-delayed Censu Moran Paola health hub.

Sources close to the deal say the government will not be able to recoup the €2m in fines it had imposed on the consortium.

But this is just a fraction of the entire €22m contract that was up for grabs.

In late 2018, the government had agreed a €22m deal for the consortium to build the health centre, with works set to be completed in a little over two years. But, six years later, the health centre remains closed to the public.

In September, the health authorities scrapped an agreement with the consortium in charge of works at the health hub, saying that a series of missed deadlines had meant that it was unable to open to the public.

Although works on the centre were reportedly completed, the contractors, Ergon-Technoline, had failed to issue a series of compliance certificates, preventing the government from signing off on the building, the authorities said.

The delays and missed deadlines also meant that the consortium had been slapped with daily fines, totalling some €2m.

But the consortium took exception to the government’s decision to scrap the deal, filing arbitration proceedings in front of the dispute adjudication board at the International Chamber of Commerce.

Sources say the arbitration board turned down most of the consortium’s requests for compensation for additional costs and services it incurred throughout the project.

But the board also shunned the government’s requests to be compensated for damages incurred by the delays, including a loss of EU funds and additional project management costs.

A spokesperson for the Health Ministry confirmed that arbitration proceedings had ended but remained tight-lipped on the outcome, saying it would be “premature” to comment, given that the decision is open to appeal.

Nonetheless, the spokesperson said that “both the Ministry and FMS [Foundation for Medical Services] are pleased with the outcome of the arbitration process”.

The arbitration board’s decision “has validated the position we have consistently upheld in relation to the contractor’s claims over the past months”, the spokesperson said.

“Our focus remains firmly on the primary objective of delivering a state-of-the-art Paola Health Centre as efficiently as possible, ensuring the best interests of Maltese citizens are served.”

‘Certificate of failure’: PN

The project’s seemingly endless delays came under fire from the opposition’s spokespersons on health and mental health Adrian Delia and Ian Vassallo on Monday.

Speaking from the Paola hub’s car park – empty save for makeshift MRI units set up as a temporary service – the pair described the delays as “the certificate of the government’s failure in yet another project”.

Delia pointed to the ever-increasing strain placed on Malta’s healthcare system caused by the country’s population growth over the years, saying that the provision of medical services through other hubs is crucial.

Both Delia and Vassallo argued that the government’s decision to scrap plans for a similar hub in Malta’s northern region is short-sighted, adding that the closure of the Rabat health centre is leading to ever-increasing waiting times for medical services across the country.

2025 opening

The board’s decision brings the long-awaited opening of the health centre a step closer after years of delays and broken promises.

Although an official opening date remains elusive, sources close to the health ministry say the health centre could finally open its doors to the public by the middle of next year.

The health centre, often described by minister Jo Etienne Abela as “a small hospital” is set to serve some 130,000 people.

The project was first given the go-ahead back in 2017, with works planning to be completed by 2020. However, the process came to a grinding halt when the tender process for construction works was found to have been tainted.

The initial decision to award the tender to SP BB International JV was overturned and the contract instead went to Ergon-Technoline, a joint Italian-Maltese venture.

Technoline, a company which would later emerge as a key figure in the fraudulent Vitals deal, says it has a 10 per cent stake in the consortium.