A tender to rebuild an old people's home in Cospicua will be issued this month, Robert Abela said on Sunday.
The home is set to be demolished and rebuilt due to the use of low-quality concrete during its original construction in the 1990s.
Addressing a political event in Cospicua, the prime minister dismissed "lies" about the old people's home being turned into a hotel.
"Yes, it will be built to the standards of a hotel, but a hotel for the elderly," Abela quipped.
The Cospicua home was inaugurated in 1999 by then prime minister Eddie Fenech Adami and cost an estimated €5.7 million to build.
Labour MEP Alfred Sant, who laid the building’s foundation stone in 1997 when he was prime minister, has called for an administrative inquiry to determine who should shoulder responsibility for the building's structural problems.
The Nationalist Party has also called for an inquiry, saying one is needed to determine the real state of the home.
Opposition wants to spend money on weapons
In another part of his speech, Abela accused the Opposition of being intent on warmongering.
Reacting to calls by European Parliament president Robert Metsola for the EU to up its defence spending, the prime minister said the government aims to invest in people, not weapons.
"We do not believe in investing more in armaments, we believe in investing in people and peace. That is the key to economic and social progress."
Abela warned against people falling for the narrative peddled by "conservative forces", who seek to give the impression that Malta's economic achievements are a given.
"Conservative forces from the establishment are trying to induce apathy among the electorate. They are doing this because they know when it comes to the arguments and proposals, they can never beat this movement.
"They are trying to convince people everything should be taken for granted. They want to give the impression that economic results and achievements fall out of the sky. Do not fall for this narrative, this trap," Abela said.
He said voting for all Labour candidates was the only way to ensure Malta had a strong voice in the European Union.