By Sami Zaptia
Tripoli, 21 August 2013:
The International Hospitals Group (IHG) held a workshop at the Waddan hotel in Tripoli last week . . .[restrict]where it attempted to answer some of the unanswered questions about its agreement to build 9 to 12 brand new hospitals in Libya.
Libya Herald had revealed in June that IHG had an agreement to build nine hospitals all over Libya for an estimated LD 2 bn.
In August, Health Minister Nureddin Dughman had revealed at a press conference that this agreement had been expanded to 12 hospitals – but again gave no starting date for the contract nor confirmed its total value. He also confirmed that IHG would be financing the project.
At last week’s workshop, IHG were asked whether they had signed an MOU or a contract, and they insisted that it was a contract. Yet when asked to confirm a start date or the value of the contract, they were initially unable to.
Later on, via email, IHG informed Libya Herald that “the contract was staged”. IHG explained that they were “currently about to work on the survey and design phase. This work will determine exactly what the construction and design challenges are at each site and the configuration of each hospital – depending on geology, site restrictions and health profiles of the local area. This will have an impact on construction costs”, IHG explained.
“Other variables include choice of medical equipment. Only after this survey stage (which is being paid for separately and under its own contract) will we be in a position to put a firm overall cost on hospitals”, IHG concluded.
IHG did concede, however, that it had included “an estimated figure” in the initial contract it had signed for the overall cost of each 150-bed hospital of 100 million pound sterling.
This figure included the survey and design stage, construction, supplying all the medical equipment, installing IT systems and medical databases, establishing operating policies and procedures, opening and managing the hospitals for five years with senior qualified managers, training clinical and non-clinical staff.
IHG added that this would “take it from greenfield site to a fully equipped hospital operating to international standards with fully trained staff capable of sustaining the facility after IHG managers and trainers depart after 5 years”.
If IHG’s estimated figure is accurate, then the 12 hospitals would cost Libya 1.2 billion sterling or LD 2.4 billion.
With regards to the presentation of the various projects they had worked on, IHG made a very impressive powerpoint presentation with great graphics showing the various stages of building a hospital. They showed numerous examples of past projects they had executed, including examples in Syria, Ghana, UAE, and Saudi Arabia.
To be fair to IHG, many of the questions posed at the workshop were for the Minister of Health who had unfortunately decided to leave during the break – just before the question and answer session.
At the question and answer session of the IHG workshop, questions were asked by members of the public and the media about the transparency of the IHG tender process.
For example, a doctor had asked if a feasibility study had been conducted for the 12 hospitals. Who had decided what Libya needed in its health sector and when was an “independent” study conducted that concluded that Libya needed 9-12 new hospitals? Many were not happy about the Ministry of Health’s public relations regarding the whole IHG award process.
For example when this so-called contract was signed – neither the public nor the media were invited to the private signing ceremony. The IHG executives on the top table attempted to answer questions that they felt were within their domain – but naturally could not speak on behalf of the Libyan Ministry of Health.
Nevertheless, IHG made it clear that they were very happy to answer questions and “keen to have these issues openly debated and to engage with key constitiencies in Libya over them”.
When Libya Herald interviewed Health Minister Dughman early this month for the forthcoming August edition of the Business Eye magazine, we put some of these questions to him.
Dughman said that he was not the sort of person who made a big fuss about things – the signing ceremony – and under pressure admitted that his Ministry could have handled the signing process in a more transparent way. He accepted that in the new Libya the process of doing things was just as important as the end result.
With regards to the process of awarding this contract, Dughman said that “tens” of companies had put forward proposals – but that they all required Libya to fund the projects. Only IHG offered to finance, design, build and operate the projects, he said.
Still, Dughman could not confirm either a start date nor a final total price for the contract. However he did defend awarding IHG the contract on the bases that other companies did not offer finance and, that other companies had offered to renovate and run existing hospitals for about US$ 40 million (LD 50 m) per hospital, per year.
For 12 hospitals over 5 years this would have cost Libya LD 3 billion, which for him made the IHG deal a better arrangement than the other offers.
For the complete interview with Health Minister Dughman and more details from the IHG workshop, see the forthcoming August edition of the Business Eye magazine.