The Tribune

By Neil Hartnell

nhartnell@tribunemedia.net

A US group’s $670m proposal to transform Bahamian healthcare infrastructure is just one of “five offers on the table”, a Cabinet minister revealed yesterday, adding: “It’s nice to have options.”

Dr Duane Sands, pictured, minister of health, told Tribune Business that The P3 Group’s offer to finance the construction of new public hospitals for Nassau and Freeport via a massive public-private partnership (PPP) would have to be assessed and rated against rival proposals pledging to do exactly the same.

Revealing that the Ministry of Health had been close to determining how it would move forward just prior to the category five storm’s arrival, Dr Sands said Dorian’s devastating impact on Abaco and Grand Bahama was a game-changer that had forced it to focus on “climate resilience” as a priority in healthcare infrastructure planning.

He described some of the rival offers to The P3 Group’s post-Dorian pledge as “very radical”, citing one submission that “proposed to buy the entire health infrastructure in The Bahamas and operate it”. The minister revealed that this “unsolicited” offer came from Steward Health Care, a Dallas-based group that is described as the largest physician-led, for-profit health network in the US.

Other offers in the government’s possession for the overhaul of Princess Margaret Hospital (PMH), and the replacement of Freeport’s Rand Memorial Hospital, have been submitted by Medistar, a medical real estate development firm, and SYMX Healthcare Corporation, a Florida-based designer, builder and manager of healthcare facilities.

Dr Sands yesterday revealed that Baylor Medical Centre is also in contention. While expressing appreciation for The P3 Group’s offer, he added that it was “not the first to offer concessionary terms” such as low interest rates and an extended payback period for it to earn a return on its investment.

He added that the group’s submission would be “incorporated” into the Government’s thinking as it sought to advance post-Dorian restoration and upgrades to the nation’s deteriorating healthcare infrastructure, adding that the Minnis administration needed to “flesh out a fair and transparent process” for determining which - if any - offer to accept.

Dr Sands acknowledged that the Ministry of Health may “have to go back” to some of the contenders and ask for revised proposals in an effort to “harmonise” them, since they had each focused on different elements. This, he explained, meant it was akin to “comparing apples and oranges” when seeking to analyse their merits and weaknesses.

“I’m happy to share with you that we now probably have five different offers on the table for capital and infrastructure works for health,” Dr Sands told Tribune Business. “The P3 Group offer, as generous as it is and appreciated as it is, is not the first offer we’ve had on concessionary terms.

“We’re very grateful for another offer. What we have been doing, and continue to do, is review the various offers. We’ve been at this for almost a year, looking at the various forms of approach submitted by SYMX and Medistar, among others, as well as Baylor Medical Centre.

“We’ve had a number of offers for private-public partnerships with health, and have been engaged in an awful lot of due diligence. We’ve had teams travel to look at projects around the US completed by various companies, reviewed the facilities operated by various companies. Prior to Dorian we had been preparing to make a decision on the way to go.”

Dr Sands said the latest offers from SYMX and Medistar had been submitted around November 2019, and he added: “We have other offers on the table, and they require careful consideration to identify the strengths and weaknesses of each of them, and how appropriate they are for healthcare moving forward.

“Some of the proposals were unsolicited. We had an offer to buy the entire healthcare infrastructure in The Bahamas; to buy it and run it the way it is done in Malta. It is on the table. It is a totally different approach. That’s the Steward Healthcare Group. They would have come in with a very radical proposal.

“We have other groups that have unsolicited proposals from prior to Dorian to build a new Rand Memorial Hospital and, subsequently, a new PMH. We’ve met with the group out of Baylor in conjunction with the Grand Bahama Port Authority (GBPA).”

Some 68.7 percent of The P3 Group’s $975m proposal is devoted to entirely covering the Government’s $670m post-Dorian healthcare ‘wish list’, which was provided to potential donors prior to Monday’s pledging conference at the Baha Mar Convention Centre.

Wrapped into that $670m is $500m for a new hospital to replace PMH; $120m for the Rand Memorial Hospital’s successor; and $50m to reconfigure Abaco’s health clinics and care system. The remaining $305m of The P3 Group’s proposal is broken down into $155m for “other essential government facilities”, such as housing schools and airports; $100m for renewable and solar energy; and a final $50m for community-based projects.

However, the P3 Group, a US-based commercial real estate and PPP specialist, has made it clear from the outset that its $975m “pledge” is not a donation but a loan that will have to be repaid by the Government, Bahamian taxpayers and users of the new hospitals and other facilities it would construct over time.

It is really offering a traditional PPP structure whereby it would seek a return on its investment, albeit at concessionary interest rates that it says could be as low as 3-4 percent, although these terms would have to be negotiated should the Government accept its offer.

The P3 Group says the benefit of its proposal, where it would design, build, own/operate what it constructs for a 20-30 year period, recouping its investment through rent and user fees, is that it lessens the financial burden on the Government to find such capital up-front. However, some observers believe it would have too much ownership/control of key Bahamian infrastructure should the Government accept its proposal in full.

Dr Sands, however, yesterday expressed amazement that public debate on The P3 Group’s proposal seemed to assume it was a ‘done deal’. While its offer had elevated health infrastructure improvements to a national issue, he added: “Let’s be very clear: The whole discussion about who owns what, and development by non-Bahamian entities and control of the entity, no decision has been made.

“There are so many things to be considered. One day after someone has made an offer, I’m amazed we’re having conversations about how we’re going to sell the healthcare system or someone owns the hospital. There’s no decision on whether to accept an offer or what is a reasonable approach, but we have been doing our homework.

“Someone said we can’t borrow any more money. Who said we’re going to borrow money? It has yet to be decided but, clearly, the status quo is not acceptable,” Dr Sands continued. “We will collate all the offers, create a spread sheet that compares apples to apples, oranges to oranges. The final arbiter will be the Cabinet of The Bahamas, and no decision has been made.

“While we have this [P3 Group] offer on the table, it’s not the only offer, and will be incorporated into the consideration. We hope to flesh out a fair, transparent process as to how we move forward. We’ve had in hand completed, signed proposals from a number of companies. The next step of this process was to review them at the highest level, the Cabinet level. We’ve been at this for more than a year.”

Dr Sands said the Ministry of Health and Public Hospitals Authority (PHA) had already “started walking down this road” themselves by examining the feasibility and design for the new emergency room, mother and child care ward and imaging department at PMH - a $200-$250m investment that the Minnis administration committed to in its 2017 general election manifesto.

He added that this represented the second phase of the plan for PMH’s staged redevelopment that had been drawn up by US architectural/design firm, the Beck Group, headed by Bahamian, Fred Perpall. The first phase was the already-completed $100m Critical Care Block.

Then Dorian intervened. “I think it catapulted the need for a new climate resilient facility in Grand Bahama to the top of the class, head of the class, though it was an option we had been considering,” Dr Sands told Tribune Business.

“It’s now an absolute requirement. The discussions with the United Nations Development Programme (UNDP) brought into focus even more strongly whether PMH is climate resilient. The documents submitted to the UNDP broadened the scope. They asked what health should look like in the future post-Dorian. That was a different question from when we got the initial proposals.”