Regulating the construction industry

The Minister for Public Works and Planning, Stefan Zrinzo Azzopardi, has this week issued the government’s proposals for regulating the Construction industry. These proposals are open for consultation until April 21.

The need for the licensing of contractors who carry out excavation and demolition works has long been felt and what the Minister is proposing is certainly a step in the right direction. The Minister in fact published a draft Legal Notice that sets up three licensing regimes - for excavation, demolition and construction - that are to be the responsibility of the Building Construction Authority (BCA).

The Malta Developers Association (MDA) that has been clamouring for this reform for so many years has welcomed the news that has also found the approval of the GWU, even though workers in the construction industry are not usually unionised.

Thankfully, no new authority is being set up but the already existing BCA will be responsible for the issuing of licences and monitoring licence holders. Naturally since its set-up, the BCA - previoulsy the Building Regulations office - has already assumed a monitoring role regarding works being carried out - which work must be carrried out according to method statements submitted after a development is approved by the Planning Authority. Indeed the three sectors in which method sdtatement are to be submitted - demolition, excavation and construction - had already been identified as such. The most important missing link was the need for licensing for contractors involved. Actually construction was somewhat regulated by the old mason’s licence. This needs also to be revamped and moved from the Works Department to the BCA.

This is an area rife with abuses with licensed masons assuming responsibility for some ‘friend’ who does not have a licence. The BCA should monitor also this situation and take action in case of abuse.

The Minister is right in saying that the new regime cannot be introduced overnight and that a transition period is necessary until the system is set up properly.

The Minister therefore announced a time-line during which the regime will be set up. By the beginning of 2025, no works without the responsibility of licensed contractors will be allowed. Licenses will in the meantime be issued on a temporary basis to those who already carry out this work. Even so, the BCA would be able to suspend temporary licences or licence applications if the contractor in question breaks the rules.

Courses leading to qualifications in the construction industry are already organised by MCAST. However in the absence of a licensing system these courses were not attracting many applications. This will probably change when only qualified persons will be licensed permanently.

Apart from the fact that licence holders will have to be qualified to carry out works for which they assume responsibility, they have to be insured to safeguard their employees and third parties.

This, in my opinion, is a very important provision. When accidents in the construction industry happen, there are two aspects to be considered: the civil damages and the criminal responsibility. The insurance provision protects the right of third parties to be compensated for damages. On the other hand, the criminal responsibility will be borne by the licence holder just like a licenced driver is held reponsible in traffic accidents.

The introduction of the system announced by the Minister should go a long way in the country’s efforts to avoid accidents in the building industry. This will not eliminate all accidents since accidents are mostly the result of human error and all humans can make mistakes. However, the licence gives a heavy legal responsibility to the licence holder and a suspension of licence should serve as a deterrent against carelessness.

One has to remember that until the proposal becomes law, every Tom Dick and Harry can - at whatever age - buy a big machine and start assuming excavation and demolition contracts - a situation that has led to the current state of affairs, which sometimes is akin to the manners of the Wild West.

Rule of law

Steward Health Care Malta has appealed a civil court judgment which annulled the concession granted to it by the government to run three public hospitals after finding fraud.

In a statement on Wednesday, Steward said it has also requested a European Court of Justice (ECJ) preliminary ruling since it viewed the judgement as undermining the rule of law. Personally, I think that the ECJ will refrain from touching this mess, which is hardly within its remit.

The company said the judgment presents major concerns for the rule of law in Malta and has serious implications for the future of foreign investment in the country. In February a Maltese judge ruled that the privatisation deal involving St Luke's, Karin Grech and Gozo General Hospital was fraudulent, with evidence of wrongdoing at every stage of the process.

Steward claimed that it had transformed a bankrupt enterprise - the Vitals concession - into a professionally managed operation with a sound financial footing. It avoided saying whether it had delivered what it was contractually obliged to do.

In what must be a veiled threat, Steward said that it had kept the US Embassy and the US State Department – which was on several occasions present at negotiations on the concession terms – fully informed at all times of all relevant events and engagements with the Government of Malta.

It insisted it remains committed to operating in accordance with its highest professional standards and values but ignored the fact that it had not delivered on its obligations.

I construed that the comic tragedy was to continue in the appeal stage. I almost suspected that Steward might even call the Chairman of the NGO Republika, to the witness box to confirm to the Court that there is no rule of law in Malta.

But within 24 hours, Steward then announced the termination of the services concession agreement with government, citing breaches of commercial agreements. They accused the governement of failing to adhere to their own promises to renegotiate the ‘unbankable’ and unsustainable terms of the concession... which they had accepted when they took over the Vitals contract. Using this argument, Steward tried to justify why they failed to raise finances to deliver fully on the terms of its contract.

On its part, the Maltese Government is rejecting the claims outright.

Perhaps Steward can tell us how much money they actually invested in Malta and how much they actually lost in this sad episode.