Case Example: Abbotsford Regional Hospital and Cancer Centre
The British Columbia provincial government and local health authority have acknowledged the need for a new hospital facility
in its area since 1990. Political postponements and capital backlogs have delayed the project. As part of the provincial government's
public-private
partnerships
initiative, Partnerships BC facilitated a competitive tendering process for the province's first ever design, build, finance
and operate hospital.
Construction began in 2004 on the 300-bed facility and it is to open in 2008. The 30-year agreement includes a penalty schedule if the facility is not ready on time, set capital commitments from the public partner at $71.3 million and a performance-based annual operation payment of $41 million. "Operation" covers non-clinical services such as food, grounds keeping, janitorial, laundry and security. Expected savings over the life of the agreement: $39 million.
If the private partner is not performing the maintenance and operation duties to a specified standard, the public partner can deduct or withhold the entire annual payment. Try that with a monopoly government union.
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