The design and construction of Mater Dei Hospital cost roughly three times as much per bed than the estimated cost established by international benchmarks, a report by the Auditor General shows.
The report had been requested by Finance Minister Edward Scicluna in 2018, as a follow-up to another report the National Audit Office had presented in 2018. That report had been inconclusive due to insufficient documentation, but this time round, documentation made available by the Cabinet Office allowed the NAO to look into the matter in further detail.
The NAO was asked to carry out a benchmarking study to compare the cost to build Mater Dei Hospital with the cost to build other hospitals in Malta and overseas.
This exercise showed that when adjusted to 2018 prices, the design and construction of the 825-bed Mater Dei Hospital cost €728,485 per bed. International benchmarks – the NAO quoted Spon’s Architect and Builders Price Book 2018 – suggest that the construction cost of a hospital should range between €205,000-€275,000 per bed, roughly a third as much.
SAMOC’s cost per bed much lower, but still above international benchmarks
As it happens, the cost to build the Sir Anthony Mamo Oncology Centre also exceeded these benchmarks, but the cost per bed was roughly half that of Mater Dei at €360,398 in 2018 prices.
The NAO also compared the construction of Mater Dei and SAMOC in greater detail. Based on the benchmarks set by the construction of SAMOC, the construction of Mater Dei Hospital cost 25% higher, representing an additional expense of €97 million.
Mater Dei’s cost per square metre was 30% higher after accounting for inflation. But while the cost per bed may have been much higher than international benchmarks would suggest, the cost per square metre is actually on the lower side when compared to the cost in developed countries.
But this discrepancy is largely due to the fact that Mater Dei’s area, per bed, is significantly higher than the average. At 324 square metres per bed, its area is roughly 16% higher than the World Health Organisation’s recommendations would suggest.
Constant revisions see cost reach 5 times original target
The process leading to the construction of Mater Dei was a fraught one, as the NAO shows, characterised by numerous revisions to the plans. The most significant revisions occurred as a Labour government came to power in 1996, and when a fresh Nationalist administration replaced it two years later.
The original contract, signed in 1995, had foreseen the construction of a 480-bed hospital at a cost of Lm32 million (€74m), with construction estimated to require 30 months. Ultimately, the design and construction of the hospital – which was inaugurated in 2008 – cost €583.1 million, roughly five times as much when inflation is taken into account.
Audit confirms PN’s governance failure, Labour claims
In a statement, the Labour Party said that the investigation was a fresh confirmation of the “failure in accountability and governance during a Nationalist Party administration.”
It said that the report also confirmed the incompetence of Nationalist governance, as well as the “theft” of millions in public funds.