Regional Hospital of Tlalnepantla procurement advisor
This project, the first of its kind for the Social Security Institute of the State of Mexico and Municipalities, comprised the development of a new hospital in Tlalnepantla to replace the existing facility.
The new hospital has 120 inpatient beds, 100 outpatient beds, 26 consulting rooms, three operating theatres, two ambulatory surgery operating theatres, dialysis facilities and an intensive care unit. The hospital offers acute medical services to 220,000 beneficiaries of the Social Security Institute of the State of Mexico.
The project used a design-build-finance-maintain PPP scheme with a duration of 25 years. The public sector will retain the responsibility for clinical services, while the private subsidiary company will be responsible for the construction, facility management and non-clinical services. The subsidiary will also provide all medical equipment and consumables during the lifetime of the contract. The financing deal for this hospital was significant because it featured the first equity investment from pension funds in Mexico in a greenfield social infrastructure PPP project using a development certificate (CKD). The majority of the funds for the project came in the form of long-term debt from Banco del Bajío.
The project received the 2011 Project Finance Latin America Deal of the Year Award for its innovative structure.
Currie & Brown, jointly with the IFC (International Finance Corporation of the World Bank), acted as the procurement advisor for the project. In this role we provided all services related to the co-ordination, supervision and integration of activities, stages and products required for the development of the hospital. Our services included carrying out a feasibility assessment, development of cost-benefit analysis, technical advisory, payment mechanisms and performance indicators.
We played an integral part in the whole process by delivering the technical specifications and financial requirements and co-ordinating the legal aspects of the project. We also conducted interactive workshops to explain the technical and financial aspects of the tender to its participants.
The success of the Tlalnepantla Hospital set a precedent for private and public sector parties for the viability of PPP projects in Mexico. The client benefited from cost containment advantages and increased control over the execution of the contract. The supervision scheme further set an example of best practices for evaluating the performance of both stakeholders in infrastructure development projects. Our participation increased the client’s confidence in the quality of the construction process and with the PPP model as a desirable alternative for future developments.
The hospital is now fully functional and is performing well in meeting targets.