Post on 22-Sep-2020
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CASE STUDY: PPP in Italian Health Sector
Massimo Ricchi Presidency of the Council of Ministers
Department for Economic Policy Coordination and Planning
PPP Task Force, Italy
Geneva, 21-24 February 2012
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UTFP activity “on the field” : institutional framework
The Task-Force – Organization
Inspired by the UK PFI Taskforce
Established by law
Previous consultation with the main parties involved
Group of 11 professionals:
Legal, financial, technical expertise selected
from both private and public sector.
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UTFP activity “on the field” : institutional framework (2)
The Task-Force - Mission
Educational Role
Promoting PPP techniques
Developing a PPP Methodology
Identifying workable PPP projects to be repeated
Database of successful PPP deals
Assistance Role
Assistance to central, regional and local administrations
From the identification of suitable projects to the evaluation of offers
Multidisciplinary skills and expertise
“Policy Making” Role
Improvement of legal framework
“Best practices” (standardisation of practices and contracts)
Check PPP Contract for National Bureau of Statistic
Analysing risk distribution in the contract in order to put public investment on
or off the public budget
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Project Finance in the Health sector in Italy since 2004
Initiatives:
15 initiatives currently planned (0,8 billion €)
53 concession awarded (3,7 billion €)
15 initiatives at bidding stage (0,65 billion €)
61 initiatives quitted (1.950 billion €)
Public contribution in capital expenditure (grant amount):
Average grant amount: 55% of Capex
Average procedure duration to conclusion:
Public initiative procedure: 13,4 months
Private initiative procedure: 36,8 months
Source: Finlombarda 2011
Some figures:
ca. 5,15 billion euro total investment
ca. 17.300 beds
240.000 – 300.000 € average cost of bed
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2006 2007 2008 2009 2010
Conventional Proc. 232 292 239 511 141
PPP Proc. 346 590 287 187 260
Capex Healt Sector 578 882 526 698 401
Source: Finlombarda 2011
Project Finance in the Health sector in Italy since 2004(2)
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PPPs in the Italian Heath Sector 2004-2011
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3
4 1
>10 projects
5-10 projects
3-5 projects
1-2 projects
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5 4
3
3
2
1
1
1
2
5
3
5
2
Source: Finlombarda 2011
North 47
Centre 7
South 20
Project Finance in the Health sector in Italy since 2004 (3)
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PPPs in the Italian Health Sector
What the private sector can do: Providing non- medical services
Estate maintenance
Supply of energy and fluids (heat, air conditioning, water, medical fluids, etc.) Medical equipment maintenance Cleaning services of building and clinical equipment Laundry Waste disposal Catering for patients and personnel Security services Housing services (Reception, booking, management of hotel facilities, etc.) IT services Commercial services (bar, newspaper, restaurant, shops, etc.) Parking facilities Laboratories and Radiodiagnostic service management (occasionally)
What the private sector cannot do: Providing medical services
No nursing and clinical services delivery No medical ruling of the hospital
Project Finance in the Health sector: fundamental principle
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Lombardy's procurement approach
6 hospitals in Lombardy
4 hospitals in Calabria
Intervento
Valore complessivo
dell'intervento
(IVA inclusa)
Importo Contributo
Pubblico
(IVA inclusa)
%
Regione CALABRIA 406.978€
Ospedale della Sibaritide 133.396€ 92.185€ 69,1%
Ospedale di Vibo Valentia 132.418€ 88.453€ 66,8%
Ospedale della Piana di Gioia Tauro 141.164€ 91.983€ 65,2%
Regione LOMBARDIA 1.075.912€
Ospedale Niguarda Ca' Granda 287.796€ 175.263€ 60,9%
Complesso Ospedaliero di Vimercate 166.768€ 105.896€ 63,5%
Ospedale Sant'Anna di Como 169.580€ 138.942€ 81,9%
Ospedale di Legnano 133.476€ 83.500€ 62,6%
Ospedale di Garbagnate Milanese 126.806€ 79.841€ 63,0%
Presidio Ospedaliero "San Gerardo" di Monza 191.487€ 121.218€ 63,3%
TOTALE 1.482.891€ 977.282€ 65,9%
Project Finance in the Health sector: strong contracting authority
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The Innovative procurement approach
THE FOUR TUSCANY HOSPITALS
THE NEW MESTRE HOSPITAL
THE CANCER THERAPHY CENTER MESTRE
Project Finance in the Health sector: catch the innovation
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The new Mestre Hospital
PROJECT DATA
• Project Name: The new Mestre Hospital
• Category: DBFO (Design Build Finance & Operate)
•Awarding Authority: Unità Sanitaria Locale 12 Venice (NHS Local Authority)
• Procedure: Concession under private initiative
• Number of beds: 680
• Number of Op. Rooms: 16
• Number of Intensive Care Rooms : 24
• Parking Spaces : 1092 ( incl. 557 for visitors)
• Total investment : € 245 million (VAT included)
• Public contribution: € 105 million (45%)
• Concession length: 29 years (incl. 4 years of construction)
Project Characteristics
The project concerns the construction of a new hospital to replace an inadequate existing hospital to consolidate and improve specialist hospital services (e.g. oncology, cardiology, eye-surgery).
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Mestre Hospital: a case of success
January 2008
Official Opening of the new Mestre Hospital
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What to improve
No specific risk assessment or risk analysis realized in the early stage of the project through a matrix of risks
Case studies prepared by the promoter
Difficulties in comparing proposal in the different stage of the procurement process
Need to revise some financial aspects of the concession
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The Cancer therapy Center
PROJECT DATA
• Project Name: Cancer therapy centre
• Category: DBFO (Design Build Finance & Operate)
• Awarding Authority: (NHS Local Authority)
• Procedure: Concession under private initiative
• Bidders: 3
• Project awarded: choice of the private partners
• Total investment : € 168 million (VAT included)
• Public contribution: No public contribution ex ante
THE CANCER THERAPY CENTER: Project Characteristics
The project concerns the construction of a Cancer therapy center. The new center will be part of an existing hospital to consolidate and improve specialist hospital services.
The project was awarded and the contract signed.
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Risk assessment procedure: the new approach in the concession notice
A greater attention to risk assessment procedures through specific additional requirements apart from those provided by law. In particular, the promoters taking part in the bidding process had to:
1) Provide information on risks
•Present a matrix of risks;
•Specify who is taking each risk;
•Specify in which contract clause the risk is managed and how;
•Specify the mitigation instruments provided.
Concession Notice: UTFP regulatory advices
The risk matrix prepared by the promoter and agreed on by the administration presents the following structures:
1. Design of the project (6 risks) 2. Constructions (30 risks) 3. Management phase (12 risks) 4. Costs of management phase (6 risks) 5. Revenues (8 risks) 6. Resolution of the contract (6 risks) 7. Technology (2 risks) 8. Return of the infrastructure (1 risk) 9. Other risks (12 risks)
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2) Present a Financial plan making a distinction between the costs of services + VAT and the charge required for the coverage of construction costs.
3) Present the electronic version of the Financial Plan.
4) Present a validation of the project’s input from the certifying bank
Other tips by UTFP for better valuation of the bids in concession notice
Concession Notice: UTFP regulatory advices (2)
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CONTACTS
UNITA’ TECNICA FINANZA di PROGETTO
Presidency of the Council of Ministers
Head Office - Via della Mercede, 9 – 00187 Rome, Italy
Tel. +39 06 6779 6512 – Fax. +39 06 6779 6573 – www.utfp.it
Massimo Ricchi – Lawyer and member of UTFP Tel. +39 06 6779 6520
Mob. +39 347 225 3268
E-mail: m.ricchi@governo.it