Led by the Cross River State Government under the leadership of Senator Liyel Imoke, the Calabar Specialist Hospital constitutes a key part of the country’s on-going infrastructure modernisation programme and a landmark project on the way to advancing quality and affordable healthcare in Nigeria. Situated in the 367-hectare Summit Hills real estate development, the project represents a single facet of the country’s continued commitment to address its glaring infrastructural inadequacies and its commitment to fostering effective public-private partnerships throughout.
The Summit Hills development marks the first of its kind for any government in Nigeria – either state or national – to deploy public private partnership approaches in bundling diverse, interrelated offerings over a large geographic area. The site is home to the 5,000 capacity Calabar International Convention Centre (Alliance Facilities Management Pty); the Calabar Golf Course Residential Estate (joint venture with United Property Development Company); the 18-hole Golf Course (maintenance contract with Bouman Golf) and a host of others, though the Calabar Specialist Hospital is arguably the most impressive project of them all.
Governments and public administrators are constantly searching for more efficient ways to deliver healthcare services to the public more effectively and economically
The Governor’s Office, as the coordinating agency, is the implementing authority charged with delivering the project, based on a Design-Build-Operate PPP model. Both the design and construction is tendered in combination with the equipment and operation of the hospital, and the private contractor was originally responsible for constructing and equipping the hospital within the estimated capital spend, and for running the hospital in the confines of a set operational expenditure budget.
This was reappraised through an addendum to the PPP Agreement in January this year, under which the concessionaire is expected to provide $20m, otherwise equivalent to 50 percent of the estimated project capital expenditure, as equity participation.
In doing so, a special purpose vehicle – Calabar Specialist Hospital Limited – has been incorporated to reflect the new ownership structure of the venture.
The Cross River State
Cross River State is in the south-eastern corner of Nigeria and shares a national boundary with the Republic of Cameroon to the east of the state. With a population of approximately 3.2 million people and a reputation for being the most peaceful, secure and environmentally conscious state in Nigeria, the region has come to be seen as the country’s investment and tourism destination of choice.
The region’s reputation is best seen by way of the numbers in attendance at the annual Calabar Festival/Carnival Calabar, which routinely attracts over 100,000 visitors and nearly half a million on-site spectators to the state each December. What’s more, the state has enjoyed over $3bn worth of inward investment throughout the last five years, stemming from global giants such as General Electric, Arte Group, Wilmar International and a host of local investors – Brentex Petroleum, Honeywell Group and UNICEM among them.
The Cross River State House of Assembly, through the powers conferred on it by the Constitution of the Federal Republic of Nigeria (1999), enacted the Cross River State Public Private Partnerships Law in 2010 so the Public Private Partnership Council and the Bureau of Public Private Partnerships might regulate the relationship better between the public and private sectors in the provision of goods and services. The law, combined with existing policies, regulations and institutions supports the origination and sustainability of the hospital project, including the establishment of health
The concept of the Calabar Specialist Hospital was born of a vision of the state administration to provide quality and affordable healthcare services, primarily to the people of the state, with a view to extending these same services to neighbouring states. Acknowledging the importance of transparent procurement and technical assistance in successful PPPs, the government retained the services of the International Finance Corporation (IFC) in 2011 to provide technical advisory support towards establishing the project on the basis of a PPP. The project was to become the IFC’s first experience of healthcare at a sub national level in Nigeria, and so, the IFC enlisted the support of PharmAccess-AMPC (PAI) as technical consultants, and the consortium of Eversheds and Aluko & Oyebode as legal counsel.
The project rationale is to provide an extensive package of secondary health care services, including a gateway clinic offering primary healthcare within a referral mechanism. This, in the medium- to long-term, is expected to significantly reduce the increasing level of medical evacuations, as well as guarantee specialist healthcare and provide system-wide efficiency gains, consistent with the state’s aspirations to cement medical services as part of its tourism offering. The $40m project encompasses the design, build, finance and long-term maintenance of the 105-bed facility and, upon completion in March 2015, the hospital will offer a full spectrum of secondary healthcare solutions, including specialist services such as diagnostics, surgery, radiology, orthopaedics, paediatrics, gynaecology, and neurology.
The hospital will also provide equitable access to all residents within and outside the state through referral from primary public health centres and private facilities. This aspect features prominently as part of the government’s social welfare programme, which includes its free healthcare scheme – Project HOPE – for pregnant women and children of less than five years, and is set to include citizens of over 60 years of age to extend the coverage on offer.
The hospital will recruit, train and present development opportunities to local health staff, while also ensuring that referral services are provided to public patients within its catchment primary and secondary local healthcare providers. All patients, public and private, are expected to pay for services, including drug prescription and dispensaries, and public patients will benefit from government subsidies to compensate for tariffs in excess of medical insurance thresholds.
The procurement process, all things considered, spanned a total of 15 months and began with the IFC undertaking several missions to Cross River state to gain a more thorough understanding government expectations, as well as assess the economic and financial viability of the opportunity.
A rigorous, thorough and transparent procurement process was adopted in selecting the concessionaire, the objectives being to safeguard public interest in the project; demonstrate value for money; achieve sufficient measure of accountability and transparency, and, by doing so, earn and retain stakeholders’ confidence in the opportunity.
Beginning with the publication of a request for qualification (RfQ) in both local and international media, 14 firms/consortia responded to the request, and an Evaluation Committee was soon made up of representatives for key ministries, departments and agencies in the state. The committee then adopted an evaluation protocol designed by the IFC, and with strict governance compliance requirements to ensure the project is carried out responsibly.
Finalising technical options
Subsequently, requests for proposal (RfP) and a draft PPP contract were sent to the five successful pre-qualified bidders. Under the RfP, the bidders were required to submit both a technical bid – containing conceptual designs, construction time-table, proposed staffing requirements and proposed equipment, facilities management regime and clinical services – and a financial bid. The draft PPP contract set out the rights and obligations of the parties, including technical and output specifications, service and performance standards and other proposed key engagement terms. As part of the procurement process, a compulsory bidders conference was attended in December 2012, which gave the pre-qualified bidders the opportunity to visit the site and review the project in further detail with both government officials and the IFC team.
For the evaluation of the RfPs, four technical evaluation teams were formed, namely medical technical (facilities management, construction plan and human resources); medical technical (clinical services); legal technical and the finance technical teams. These teams accessed the bids in detail and gave a rating for each, only for the reports to then be approved and scored by the Project Evaluation Committee.
PPP council approvals were sought and eventually received for each of the three phases of the project procurement. At the concluding stage of the process, UCL Healthcare Services, a consortium made-up of Nigerian medical practitioners, health workers in the Diaspora in partnership with Cure Management Services, emerged as the preferred bidder.
As is the case right across the world, governments and public administrators are constantly searching for more efficient ways to deliver healthcare services to the public more effectively and economically. Outlining his expectations for the project, the state governor spoke of what he hoped would lead to “quality secondary healthcare service delivery to the public at affordable prices, and financial and operational sustainability.”
It is hoped that, upon completion, the Calabar Specialist Hospital will bridge the gap in the provision of quality healthcare and serve as a model of dynamism and innovation in the healthcare sector.