PPPHealth4All Persona – Erjon Murataj, Senior PPP Expert at PPPHealth4All

We continue our series of PPPHealth4All  interviews with prominent PPP experts around the world. And today our senior PPP expert Erjon Murataj will share the insights for development of successful PPP healthcare projects and what problems could be faced. Dear Erjon, thanks for being with us today. Could you please introduce yourself?

My name is Erjon Murataj. I have more than 10 years of experience in developing the Public Private Partnerships from public side. I have worked in Albania PPP Unit and also in Ministry of Finance of Albania, where I have been involved in preparation of various Public Private Partnership projects. My education includes a Master Degree in Business Law from the Tirana Business University. Currently I reside in Spain.

What PPP healthcare projects were developed in Albania?

Not many, but in 2013, the Albanian government pledged to implement universal healthcare coverage and has since undertaken a series of steps toward implementation of this model. Since January 2016, roughly 600,000 uninsured Albanians benefit annually from free family doctor visits and reimbursable drugs, and close to one million Albanians aged between 35-70 years old, both insured and uninsured, are entitled to benefit from free medical check-ups provided under a PPP contract.

Also in February 2015, the Ministry of Health asked IFC to assist in designing a public-private partnership (PPP) with a qualified healthcare company to provide modern public laboratory services with international standards across 18 university and regional hospitals. After a competitive bidding process, the Consortium of Labopharma (Albania) and Exalab (France) was awarded a 10-year contract, with PPP agreements signed in April 2019.

Healthcare PPPs are different from other PPPs and often certain difficulties in preparation and implementation of healthcare PPPs. Why are the problems in your views and what could be potential grounds for PPP healthcare projects failures?

There are many issues that impact PPP healthcare projects. While some of them are obvious, the others are often disregarded. There are some key elements that needs to be addressed in the right way. Those elements are important for PPP project in any sector, but my focus today will be on healthcare PPP projects. Based on my experience as PPP public official with more than 20 years of experience, I could share what is important from my point of view and what I could derive from my past and current experience.

  1. Failure to proper assess the needs

When formulating an initial idea of the PPP project, it is important to understand what kind of problem the project is solving and with what means. After shaping the initial idea, further in-depth analysis and needs assessment have to be carried out. The following questions should be asked: what the project stands for? What is the problem to be solved or the needs to be fulfilled? Who are benefiting from this project? It is a brainstorming stage and various ideas and assumptions should be brought under discussion. When we will get all the answers for the questions, all the concerns addressed and all the opportunities realized, we will get a solid project idea. A lot of projects fail to address the real needs of the country, sector and stakeholders. This is I would say a fundamental flaw.

  1. Deficient planning

After evaluating the real needs, it is time for plan and shape the project. At this stage, project specifics gets shaped. Deficient planning is the second main factor why the PPP healthcare projects often fail. There are many issues that might lead to deficient planning:

  • Different perception issues (social, cultural, economic, environmental, religious… etc.). causing different expectations and conflicts in a certain socio-economic context

  • Problems at Design-Build stage. Design-Build issues refer to the implementation of the project and mostly with the project requirements (functionality idea and main requirements). Bad design or problems during the construction affect the whole project life-cycle.

  • Costs issues. The healthcare projects in general are expensive (due to the equipment and their lifetime), this is why the planning of the real costs is very hard.

  • Lack of proper market sounding. Market-sounding is a process that involves many steps and various market players – without checking a market readiness, it is impossible to launch a successful project.

  1. Failure in procurement

Another important factor is the transparent procurement – the process of awarding the private partner that will build (operate, finance) the PPP project. Many countries have very strict procurement procedures. In my view, the procurement process and procedures should be also transparent, which is not always the case, especially in developing countries.

It is also important to properly formulate the main criteria for implementing the project. Criteria that describe the functionality of the project should be “pass or fail”. Sometimes the choice of awarding criteria is designed in the way that prevent selecting the best bidder and this would hamper a fair competition.

  1. Insufficient contract management and monitoring

After the contract has been signed, it is crucial to start monitoring the contract implementation. Many governmental entities neglect contract management and monitoring and rely on the goodwill of the private partner. The importance of this phase is vital. The public partner could collect important data and lessons to be used for improvement of this project and also for developing the new ones. Monitoring of the healthcare PPPs is orientated to the high quality medical services to be delivered through the project.

  1. Failure in getting a right advice

Many governments spend millions on mega healthcare PPP projects, and do not have the money for advisers or fail in approaching the right ones. It could be a serious drawback if the public entities do not allocate funds for advisory services. The advisers must be engaged from the beginning and they do not need to be the most expensive ones. Although hiring an adviser is not very simple and especially when they are not local based. Nowadays this process is getting more simple through the implementation of the digital solutions and information technologies. PPPHealth4All could play a vital role here in helping to identify suitable consultants. I see a great service offering from PPPHealth4All platform, which offers a lot of support for governments and PPP Units on different matters. The best offer, in my view, are the consultations on the demand with “best in the class” experts. These consultations allow to reduce time and costs for preparation of PPP projects but also to increase quality.

How to support public officials during the process of preparation of PPP healthcare projects?

PPP healthcare projects are critically needed, especially during these difficult time of global pandemic. The governments need help in developing and implementing PPP healthcare projects. It is great to have such a platform that could serve as one-stop shop for preparation of healthcare PPPs and where public officials could receive a necessary support when required.

Dear Erjon, thanks a lot for sharing your views and for your valuable insights. Thanks for joining us today.

Thank you.

Interview by Natalia Korchakova-Heeb

PPPHealth4All Persona – Ann M. Casanova, International Global Health Consultant

We continue interviewing experts in PPPs and global health. And today on the occasion of Women’s International Day, we are talking with Ann M. Casanova. Ann is an independent consultant based in the US with more than 20 years of experience in international development in Latin America, Africa, and Asia. She worked for 6 years in global health for International Finance Corporation (IFC), which is the private sector lending arm of the World Bank, authoring over 20 publications on a range of topics including PPPs. Thank you, Ann, for being with us today.

Thank you very much for inviting me, Natalia, I’m very excited to be here with you and your audience as we celebrate International Women’s Day together and as we discuss some interesting PPPs. Yes, I have written extensively about the ‘secret sauce’ of what makes private hospitals and clinics successful. And I’m looking forward to discussing those with you and your audience. 

What made this project successful?

That’s a great question. So what made this project successful? it solved many problems for the state of Bahia, the state hospital did not have access to imaging. So the patients who got care, were getting highly invasive surgeries. And that increased the health risk, and it was also costlier to the public health system. Those that were getting surgeries had longer recovery times. So, for instance, a patient that needed a simple gallbladder removal surgery, the recovery time would take 35 days to turn over the bed, and that was having a domino effect on other patients that were waiting for that hospital bed. But with this PPP, it was reduced to five days. So the result is accelerating bed turnover, and more patients had access to care. Now for the patients that were still waiting for care, it was a very stressful time because they had to endure long delays to get a diagnosis. There’s one woman that I spoke with who waited a year and a half to get a biopsy to detect if she had breast cancer. That’s an extremely long period of time. And for some patients, that translates into a death sentence. So this was a big problem. And the PPP was a game changer. And I’m happy to report that at the end, it was beneficial.

In 2015, the state of Bahia established a statewide PPP and a company called Alliar and its consortium won the tender. Alliar is one of the top 10 diagnostic imaging companies in Brazil. It operates a network in 43 cities and in 10 states in Brazil. And they won the contract to build, operate and staff new diagnostic imaging centers in 11 hospitals in the state of Bahia. So why outsource? Well, Alliar brought a depth of expertise that was scarce in Baia. They are a large scale network that brings inefficiencies. So, for instance, Alliar was able to acquire expensive equipment at lower cost. So, for instance, one MRI machine at that time would cost about $1.5 million, but Alliar had established a contract with Siemens given their size and their needs for 60 MRI machines over the period of three years, and that volume allowed them to secure preferential pricing. And Alliar also had addressed skill shortages for highly specialized radiologists that were lacking in the market. And they established a solution using telemedicine where they centralized command centers and staffed those with top radiologists. And this meant that a patient living in the Amazon could have a top radiologist living in Sao Paulo interpret their images. So this increased the quality of care. And it also meant that patients were getting results much quicker in the space of two days.

Ann, to whom would you attribute the success (IFC, government, private partner) or it was a teamwork?

That’s a great question. So to whom do I attribute the success? It was definitely teamwork, all of the players played an important role. The government recognized that it needed a different strategy and that a PPP was the solution. IFC provided advisory services to the state of Bahia just structure the PPP and in 2012, IFC also provided a $50 million in financing for earlier to grow its network. And of course, Alliar is working in partnership with the government and the hospitals to provide a rapid solution. 

What are the lessons learnt for other regions/jurisdictions?  

What are the lessons learnt for other jurisdictions? Another great question. Definitely PPPs work. They solve problems for the government. And in this case Alliar was able to deploy a solution with greater speed to market, it improved the quality of care that resulted in better health outcomes and while reducing the cost to the state. So it was able to generate a more robust package with just one simple tender and it accelerated access within its first year of the PPP Alliar had conducted 183,000 exams, and when fully implemented, it will serve about 6 million patients over the course of 11 years. So PPPs are a win-win for all but especially for the patients and Adeni, who was one of the first patients to benefit from the PPP, said: ‘I got my life back!’

There’s a very interesting example of public private cooperation. Georgia had a problem, the country of Georgia had a problem. For 70 years, the health care system was funded and delivered through the state. But after the collapse of the Soviet Union in 1991, investment in health plummeted, and along with it, the quality of care. So for decades, patients were leaving the country to get good care. Now, fast forward to 2013 patients were really struggling, people were spending 1/3 of their income on health care, and some were even forgoing health care altogether. And that led to a political outcry. So one political party promised basic universal, basic universal health coverage, and they won the presidential election, so they had to deliver quickly. The problem was that Georgia had a limited tax base, had a very small population with about 3.7 million people, high levels of unemployment, and 25% of the population lived below the poverty line. So Georgia did not have the resources to become a provider itself. And the private sector had already been investing in infrastructure upgrades. So the government decided on a public private collaboration, the government decided it would not be a provider rather, it would take on the role of a policymaker, regulator and a payer, and it would reimburse the private sector to deliver treatments to patients for private facilities. So in Georgia, universal health coverage is funded by the government, but it’s 85% delivered by the private.

So Georgia is an example of good partners working well together. The model of cooperation aligns the strengths and the incentives of both sides. And it brings benefits. The benefits to the government are fiscal agility. And this is seeing through an asset light model that shifts the private sector, it shifts to the private sector, high capex investments. So for instance, one company, Georgia Healthcare Group, invested $300 million to transform the infrastructure. That was kept off the government’s books. Second benefit to the government is speed to market. Georgia Healthcare Group turned around and built 50 hospitals in 2-3 years. And thirdly, they improve the quality of care. They introduced western standards and established protocols and procedures, and invested in training medical staff. Now, the private sector also has benefits as well. It saw rapid growth, because now it has a reliable source of patient volumes. It’s able to scale and generate efficiencies, because large scale providers can deliver better quality at lower cost. And fourthly, it had a reliable payment source, the government of Georgia pays on a timely basis, which is roughly about 4,5 months. And this is really critical, because we’re seeing examples in other countries where providers are not paid on a timely basis. And this causes significant cash flows for private sector providers, and it sours the relationship. But this is working well in Georgia. So Georgia is a very interesting model of cooperation.

How PPPHealth44All could contribute to improvement of global health?

So thank you, Natalia. I guess I’d love to give some wishes to PPPHealth4All. So as the world embraces universal health coverage, PPPs will take on greater importance. Governments are realizing that they cannot do it alone, and they don’t have to. The private sector can deliver more services, they can accelerate speed to market and they can provide good quality at lower cost. Now one critical area for the future will be training on how to structure PPPs effectively. So I applaud your important work in bringing greater visibility to this.

As we are celebrating Womens’ International Day- what kind of message you would share with peers-women professionals?

Yes. Finally, on the occasion of International Women’s Day, I’d love to share some gender wishes with the audience. There’s a strong business case for having more women in healthcare leadership. There are numerous studies from McKinsey, from the Peterson Institute, from the ILO, they’re multiple. And they all conclude that there is a strong correlation between the number of women in decision making roles. So women on boards, women in executive committees and women in senior management, and profit increases, these companies are seeing profit increases of between 5-20%. And in Africa, there are some companies that are reporting profit increases of 30%. So having more women at the top improves the bottom line and it also contributes to GDP growth. There are other benefits, there’s increased innovation, there’s better decision making, and there’s the ability to gauge consumer needs. But the problem is that in health care women, although they make up 75% of the healthcare workforce, few have really reached the top. So here organizational policies matter. Women need mentoring, they need sponsorships, and women need business skills. So I invite CEOs and government officials, both men and women to create a workplace culture that embraces women and gender balance, because women pay dividends.

Thank you, Ann for the interesting insights you have shared with us today.

Thank you for inviting me today. I enjoyed our conversation. And I hope to inspire others, to use PPPs to increase access to affordable quality health care around the world. Have a great day.

Celebrating Women-Professionals in PPP Healthcare Sector

Celebrate with PPPHealth4All International Women’s Day and remarkable women-professionals working in healthcare PPP sector. We are proud of you and we admire you!

Dr Rosemary Kumwenda, member of PPPHealth4All Advisory Board
Our theme: “Achieving an equal future in a COVID-19 world”-let us celebrate huge global efforts led by inspirational women and girls who continuously seek ways of shaping a more equitable future for us all to recovery greener and fairer from the COVID-19 pandemic. We can close the gender gaps including the digital divide for women and girls to fully and effectively participate and lead in of all areas of life to drive Sustainable development for all.

Sacira Coric, Director – Infrastructure Strategy, Delivery, Financing, Turner & Townsend LLP

“Every girl and every woman has the potential to make this world a better place.  To realise the potential we must dream bold, work hard and use excellence to fight inequality and injustice.  We must each leave legacy behind us to inspire young girls to take our place and achieve more than we have.” 

Dr Rosemary Kumwenda
Karine Bachongy
Audrey Mwala
Sacira Coric
Veronica Vecchi
Violeta Isabel Pérez Nueno
Monica A. Altamirano, PhD
Rosemary Ong
Beatrice Florence Ikilai
Dennis Rosete
Helena De Flaviis

PPPHealth4All Persona – Ziad Alexandre Hayek, President, WAPPP

Welcome to the series of PPPHealth4All  interviews with prominent PPP experts around the world. And today we have a pleasure and privilege of speaking with the President of the World association of PPP Units and PPP professionals, dear friend and the highly respected colleague Ziad Alexandre Hayek. Welcome Ziad! I would like to invite you to say a couple of words about this self.

Thank you very much for this warm welcome. My name is Ziad Hayek. I am an investment banker by background. I worked in investment banking for many years in New York and London, and then I came to Lebanon to work for several Prime Ministers.  I was Secretary General of the High Council for Privatization and PPP for the Lebanese Republic and worked with 4 Prime Ministers. I have resigned in March 2019, after  running for the presidency of the World Bank, which I didn’t get. However, I have been very privileged to be part of a team that, in the meantime, has found the WAPPP and seen it grow.  It has been a fantastic experience for me, for everybody that has been involved with the WAPPP so far.

Could you please elaborate what is the World Association of PPP Units and PPP Professionals? This is a very fast growing organization, and what is your “secret sauce” that makes it so successful ?

I think it’s the collaborative spirit. The WAPPP is a non-profit association based in Geneva, Switzerland. We came together a group of experts and  you, Natalia, were there from the very beginning, and we form this Association. We are not looking for making profit , the WAPPP does not do business -so it doesn’t compete with any of its members. Therefore, it is truly the “secret sauce” is that we are to work together in a collaborative way. We’re helping each other. We’re helping build a network of PPP professionals all over the world. I always say “You get out of the WAPPP as much as you put into it “, because really it is a matter of engaging with the network which, at the end, helps everybody improve their career whether they are looking for a job in PPP projects, whether they are consultants looking for consulting work, whether it is a PPP unit looking for consultants or investors, whether investors looking for projects – could be financial, could be strategic investors.  

The WAPPP is a hub for everybody involved in to come together and to improve their career prospects, improve their ability to execute the projects and at the same time do good for the world, we have SDGs in our DNA because we are very obsessed in trying to make sure that the SDG.17
is implemented and is implemented in the right way to help people. We advocate for PPP not to be seen as a tool for procurement, but a tool for development.

Could you please mention how many chapters in the WAPPP  at the moment?

The WAPPP has many chapters. The way we are organized is  following: we have a Steering Committee, that is a group of heads of the various chapters. We have regional chapters and that we have North America, Latin America Europe, Africa, CIS countries, South Asia/Asia Pacific. We have six regional chapters today. We have four sectorial chapters: chapters for health care, airports, ports and water. And we are hoping to grow that we’re looking for leaders that would join us to lead chapters, sectorial chapters in other sectors. We have some thematic chapters. The most active one, for example, are the thematic chapter for young PPP professionals. This is a chapter that brings together PPP professionals, who are of 35 years or younger and this effort in mentoring them in growing their technical abilities. Engaging with younger professionals is very important to us. We have another chapter, which is “Women in PPPs”. We have a chapter on “People-First PPPs” and this has to do with using the People-first PPPs principles,  as best practices involving sustainability, involving ESG, involving the other measures of good governance and good practices.

Since PPPHealth4All is a platform that facilitates healthcare PPPs, could you please say how the WAPPP is engaged in healthcare PPPs and about its healthcare chapter.

Well, if we are looking at PPP as a tool for development.  It means starting to move away from regarding PPP only as a way to finance heavy infrastructure and looking to PPP to finance soft infrastructure in education in health care in improving people’s lives. And so the concept of having a chapter for healthcare within WAPPP is very essential. It is at the very center of WAPPP’s interests and activities. and in this chapter we are we have been very lucky to partner with PPPHealth4All and we will talk more about this later on. This collaboration has already given fruits to a number of webinars that have been conducted for the for various chapters of the WAPPP, including a webinar coming up March 10th  focused on health care and being organized by our Asia Pacific Chapter and Health Chapter  in collaboration with the UNESCAP. 

We are very proud to have forage this relationship with the UNESCAP and we are looking forward to grow it.  And, of course, we already have had the history of working with the UNECE. We have other strategic partners in the WAPPP,  who have helped us develop our organization. They have helped with providing many benefits to our members. I cite, for example, a partnership with APMG for the CP3P programme, which is very important PPP certification for all professionals in this field.

I just want to re-iterate your message about forthcoming seminar on 10th of Mach 2021, which is a very impressive  in terms of line-up of speakers from the Asian Development Bank,  from PPP Center of the Philippines. We have very interesting speakers coming from the private sector as well. It id also a very good example of cooperation between the WAPPP Chapters:  regional chapter of Asia and Health chapter, which, I happened to be chairing. So I am wearing two hats today.

We are very lucky to have you Natalia in that role. Absolutely. Thank you so much.

You mentioned the UNECE and actually we met in Geneva under the umbrella of UNECE meetings, but we become friends in China when attending the Third Forum on Public Private Partnerships.  What is the role of international financial organizations and international organizations in general in promoting public-private partnerships?

The international organizations have, I think, a crucial role because PPP is very prone to being mismanaged. It is a very delicate type of type of structure that involves public sector institutions private sector companies. It involves financing banks, sometimes international financial institutions. And bringing all these entities together and making sure that they all perform in the right way for any specific project is really requires having a lot of expertise. So, the aspect of sharing information, sharing experience, creating awareness are all roles that international organizations are very well positioned to play and the WAPPP, I would should say, is one such organization and it goes beyond that.  Because fighting corruption in the tendering of PPP projects and in their management providing forums for exchanging and not only information about best practices, but also sharing how being finding ways to influence, decision making so let me give an example politicians typically all over the world want their PPP projects to be done very quickly and they don’t want to go through the whole process of project design and best practices making projects qualify for ESG financing or taking the time to consult with all stakeholders, taking the time to study the environmental and social impacts and all of that. They typically don’t want to you know deal with lengthy procedures that are usually found in PPP laws, so they don’t want to apply laws or enact them.

I have had an experience for example in Lebanon where I was lobbying for the PPP law for 10 years which was very difficult, because government after government did not want to pass it. And then I was fortunate that we had the opportunity of having Lawrence Carter who was at the IFC at the time and Clive Harris who was also involved there, and they were visiting Lebanon.  I organized a meeting with our parliamentarians and that was very important in getting  them to change their opinion and vote to enact the law. They saw  and they understood that this is an international best practice and this is not something that the local PPP Unit was trying to do in order to gain some advantage.

This is what we do together with some colleagues of mine today, this is what I like doing the most and what we do the most.  It’s not about PPP training for PPP professionals or people in PPP Units, as much as it is advocacy work with parliamentarians with Ministers and governments. We are usually asked by the PPP Units to come and help to educate the political decision makers on proper PPP policy and proper PPP approaches which is really crucial for the success of the PPP Units and their projects and their pipeline.

I think from what you just said we could conclude that PPP advocacy is also an integral part of the process and is a very important part. And you, probably,  is be one of the best experts in this field.

Where do you see the synergies between the WAPPP and PPPHealth4All, as we have just signed a Memorandum of Cooperation?

PPPHealt4All is a hub for expertise, it is a hub for knowledge in the healthcare sector, especially in relation to PPPs.  We need people with a lot of experience, so they can help then PPP Units and help governments with best practices in healthcare PPPs. So that’s what the PPPHealt4All l provides. PPPHealth4All is a knowledge partner. The WAPPP is a network partner and provides the ability to take that to the global level to engage. Players in involving PPP public and private all over the world and attract them to PPPHealt4All. So, it’s a fantastic relationship where both parties benefit.

Absolutely. I think it’s all about collaborative approach – the more we do together the bigger is “domino effect” and we’re also could learn from each other. We have different chapters in the WAPPP and there are also good lessons learned also not only regionally-wise, but also sector wise and as it is a great learning to know what is happening in the other sectors as well. PPPHealt4All is a knowledge partner for the WAPPP and the WAPP is our network partner.

My sincere congratulations on the WAPPP’s success. How many PPP Units have joined recently?

Oh, we had eight Units in the past two weeks.

That’s impressive. Thank you so much for this wonderful interview and for being with after day. This is very much appreciated.

And as I had of health chapter in the World Association of PPPP Unions and PPP professionals and the Founder of PPPHealth4All, I see a lot of potential for collaboration and am happy it’s already happening. But there is so much yet to be done to achieve Sustainable Development Goals by 20030 and Universal Health Coverage. It’s so unfair that we are leaving in 201st century and still millions of people have no access to the healthcare. Public private partnerships could be very instrumental to close infrastructure gap to bring innovations and financing.  So let’s make a difference together. Thank you again and till next time.

Interview by Natalia Korchakova-Heeb

PPPHealth4All Persona – Dr. Hela Ben Mesmia, Ministry of Health, Tunisia

Dear Dr. Ben Mesmia, could you please introduce yourself?

My name is Hela Ben Mesmia and my current position is the President of the Management Unit for the societal dialogue for health system reform in the Ministry of Health of Tunisia.  When I joined the Ministry of Health in Tunisia in 2015, I worked in various departments leading the projects in the fields of public health, strategic planning, health policy, quality, patient safety. I have a long track of experience in working with all type of stakeholders: governmental departments, international partners, civil society, academia and unions.

Prior to that, I worked on clinical research, HIV management in various humanitarian settings with NGO “Doctors without borders”. I have PhD in Public Health from the University of Sousse, Tunisia and degree of PharmD specialized in public health from University of Monastir, Faculty of Pharmacy (Faculté de pharmacie de Monastir)

What is the commitment of the Tunisian government to achieve the Universal Health Coverage (UHC)?

Tunisia is a country in the Maghreb region of North Africa with a population of 11 million people. Our government was traditionally centralized and autocratic but it committed to work in a collaborative and participatory manner following 2011 revolution. The WHO is working closely with the Ministry of Health of Tunisia to re-orient the health sector towards primary health care, taking into accounts the needs of vulnerable population, and improving both quality of care and efficiency of the health system. This effort has also led to the establishment of ‘dialogue sociétal’  – public dialogue in health sector – a large-scale consultation to better capture population’s views, needs and expectations. With the second phase launched in 2017, a key expected output is the development of a new national health strategy towards 2030 and the Universal Health Coverage (UHC).

How you present this initiative to stakeholders and organized stakeholder engagement?

The process of the Public Dialogue for health system reform is a process that was launched in a post-revolutionary context in 2012. It is an inclusive process and constitute a large platform for a multidisciplinary participation. Its aim is to elaborate health policies, strategies and plans within a participatory approach. It has been an opportunity to share and exchange between various actors: communities, civil society, health professionals, and government. The Societal Dialogue process created many participatory spaces: Citizen’s Meetings on Health, Open Mic sessions, focus groups, Citizen’s jury, National Health Conference.

We consulted 1199 citizens, 65 associations, 1557 health workers and 207 experts/volunteers and established 130 Steering Committees representing various stakeholder groups.

What is the current situation with healthcare PPP projects in Tunisia?

In the National Health policy 2030 developed within the phase 2 of the societal dialogue the health system consider the health system as a one piece that include both public and private sectors. The complementarity and collaboration between the public and private sectors to achieve public health objectives is crucial. The Ministry of health must ensure a better-regulated private sector to be aligned with public health missions.

In fact, the health system’s responses to the needs of citizens of different regions are optimized through the organization of a functional network of interregional health clusters taking into account the public and private sectors. Besides, both private and public providers of family and local health are responsible for coordinating the care process.

Investments in public-private partnerships (PPPs) have not started yet, as the last legal obstacle has only just been lifted by the Transversal Law on investments in June 2019.

In Tunisia, PPPs are governed by a number of legislative texts. In November 2013, two decrees (Decree N° 2013-4630 and 2013-4631), creating a concessions monitoring unit and providing more detailed guidance on the preparation and roll-out of concession procurement procedures, brought greater clarity and transparency to the overall regime of Concession Law No. 2008-23. The Decrees govern procurement of all PPP concession projects in Tunisia, except where there is a sector specific law and there is no special law in the health sector.

The institutional framework for concessions and PPPs in Tunisia is currently laid out under the November 2013 Decree on Concessions (n° 2013-4631 of 18 November). The main body mandated to coordinate, provide advice on and monitor PPPs and concessions is the Unité de suivi des concessions (or concessions tracking unit, USC). Established under the Prime Minister’s Office (PMO). The USC is responsible for providing support to public entities throughout the procurement process, including the preparation of guidelines and model specifications, capacity building, and encouraging concession projects in Tunisia’s regions.

It is important to note that the concessions and PPP regime in Tunisia is separate from the public procurement regime (régime des marchés publics), which is governed by the 2014 Decree on Public Procurement (n° 2014-1039 of 13 March 2014). Accordingly, public procurement that does not involve concessions or PPPs is managed by a separate set of institutions.

Where do you see PPPHealth4All platform could be instrumental in achieving UHC in Tunisia?

It is difficult to achieve UHC without proper investments in the healthcare infrastructure, medical services and equipment.  Healthcare PPPs could be instrumental in helping us to achieve UHC in Tunisia and PPPHealth4All could assist in sharing best practices and assist in preparation of sustainable and people-centered healthcare PPPs.

This participation on a large scale is linked to the willingness of the actors to join a project of change to participate in the establishment of an efficient and equitable health system within a consensus. This will is the basis of the commitment and the ownership.

However, this commitment has not been well maintained over time. This is the cause of the constraints mainly related to the political stability. But the motivation of a core group of experts established since the first phase of the Societal Dialogue and which continue to this day was very crucial to the sustainability of this process.

PPPHealth4All Persona – Jacek Liput, Head of Public Procurement and PPP at Gawroński & Partners Law Firm

Askar

Dear Jacek, could you please introduce yourself?

My name is Jacek Liput and I am Head of Public Procurement and PPP at Gawroński & Partners law firm (Poland). I have many years of experience in government contracting, including public procurement regulations and PPPs. I have been involved in a number of PPP projects, including private partner selection procedures, particularly in the infrastructure, the healthcare sector and the education sector.

What is the current situation with PPP projects in the healthcare sector in Poland?

Data published by the Ministry of Development Funds and Regional Policy suggest that PPP projects in the Polish healthcare sector are still not very popular. Only 4 healthcare-related PPP contracts were concluded between 2009 and 2019, the total value of which is PLN 207 million (approx. EUR 46 million). These numbers are relatively low comparing to other sectors, such as transport, infrastructure, energy efficiency, sports and tourism and – only recently – waste management. Despite the above, I think that there is great potential for PPPs in the Polish healthcare sector. PPPs are increasingly seen to improve the healthcare system, in particular in terms of its performance, efficiency and quality. PPPs may also contribute to bringing new, advanced medical technologies into use. In my opinion a properly structured PPP project in the healthcare sector can be attractive for both the public party and the private partner.

What obstacles in your view blocks the implementation of PPP model in healthcare sector in Poland?

There are various legal and practical challenges for a successful PPP project and these equally apply to the healthcare sector. They relate, for instance, to appropriate allocation of risks between the public authority and the private partner, as well as ensuring stable and long-term financing for the project.

In terms of the Polish healthcare PPPs it is particularly important to take into account the existing legal framework for the financing of the healthcare services from public funds. As a rule, contracts with the Polish National Health Fund regarding such financing cannot be concluded for indefinite periods of time. Standard periods of the financing contracts are relatively short, while PPP contracts are normally concluded for longer periods, even as long as e.g. 30 years. This may cause risks for the private partner and these risks must be properly addressed at the selection phase.

Another challenge is that starting from the year 2021 we will have entirely new public procurement law in Poland. Polish public procurement law has recently been entirely redrafted to focus on efficiency of public-private cooperation rather than formalities. However, both contracting authorities and private partners will have to adapt to the new reality. A significant number of private partners are selected in public procurement procedures, so I am pretty sure that this change will have significant impact for the PPP market.

What is the best-known example of healthcare PPP projects in Poland?

A landmark example of the Polish PPPs and actually the first large-scale multimillion PPP in the sector is the Hospital in Żywiec project. The contract award procedure in this project ended in 2011 with the selection of InterHealth Canada as the private partner. The private partner was mandated to build an entirely new hospital and manage it for the period of 30 years, including the provision of healthcare services. I have been involved in this project at the time of my engagement with my previous law firm, advising financing banks inter alia on the PPP regulations and their practical implications.

The hospital in Żywiec has recently been opened to public, despite the Covid-19 pandemic. The success of this project will hopefully attract more interest in the PPPs in the sector and translate into a steadily growing number of PPP contracts in the years to come.

What is in your view the added-value of PPPHealth4All and how it could help in preparation of sustainable healthcare PPPs?

PPPHealth4All can certainly be helpful for all stakeholders on the PPP market by providing access to best practices, peer-to-peer support and specialized training. All these are very valuable, as know-how and experience are crucial for a PPP project to be successful.

Interview by Natalia Korchakova-Heeb

Opening Session on Sustainable Infrastructure and SDGs for PPPs – 5th Istanbul PPP Week (2 November 2020)

Shortened transcript of the opening Panel on Sustainable Infrastructure and SDGs, 5th Istanbul PPP Week (2 November 2020)

Natalia Korchakova-Heeb: Good morning, ladies and gentlemen! I am happy to greet you at the opening panel of the 5th Istanbul PPP Week dedicated to sustainable infrastructure and Sustainable Development Goals. (SDGs). Let me introduce myself – I am Natalia Korchakova-Heeb, Managing Director of SDG.17 Consulting GmbH, Germany and founder of PPPHealth4All – a global platform to facilitate sustainable and people-centered healthcare PPPs. Today we are very fortunate to have a distinguished panel: well-known experts that don’t really need an introduction.

Let’s me start from the ladies:  I am very pleased to introduce Hulya Pasaogullari, who is Principal Consultant for PPPs, Economics & Finance at IMC Worldwide. Hulya is a former Head of PPP Office within the Turkish Treasury and has a long track of experience in sovereign borrowing and public investments, PPP Advisory, Infrastructure Finance and Governance.

Next speaker is Mark Moseley, who is is Principal of Moseley Infrastructure Advisory Services. He is the former Chief Operating Officer of the G20 Global Infrastructure Hub and a former Lead Lawyer in the World Bank’s Infrastructure Practice Group. It is a special pleasure for me to introduce Mark as he is also a member of the Advisory Board for PPPHealth4All.

Next speaker is Hugues de La Forge, Partner at the Law Firm Fidal, France. He is Head for PPP projects and is in charge of African countries. Hugues has more than 22 years of experience in advising the public and private clients on contract management, disputes and international arbitration. Thanks to all of you for being with us today.

Ladies and gentlemen,

It is very symbolic that our conference is being opened with discussion on sustainable infrastructure- thanks to organisers for giving a priority to this topic.

Sustainable infrastructure is an essential foundation for achieving the Sustainable Development Goals (SDGs) and the objectives of the Paris Agreement. It is not any about building more roads, hospitals, schools – it is about building sustainably by establishing a sustainable life-cycle: sustainable design, sustainable procurement, sustainable financing, sustainable construction, sustainable operation and maintenance and impact assessment. It is also about increased quality, efficiency, innovation of service delivery and meeting all sustainability criteria (social, environmental, institutional, and economic-financial criteria). My first question goes to Mark Moseley:

Mark, during your time with the World Bank and the Global Infrastructure Hub, you worked closely with the G20 in regard to sustainable /quality infrastructure. Can you describe the G20’s approach to sustainability and the achievement of the infrastructure-related SDGs, and could you please also explain us how the G20’s approach relates to other sustainable infrastructure initiatives?

Mark: Thank you, Natalia, for that kind introduction, and thanks also to the organisers of this year’s Istanbul PPP Week for the invitation to join this panel. I had the honour of speaking at the inaugural Istanbul PPP Week in 2015 and it is great to be back at the event – although the extraordinary circumstances of this year have meant that we are not able to enjoy the opportunity to gather in the wonderful city of Istanbul.

Even though all of us have been forced to deal with the immediate impacts of the pandemic, we should not lose our focus on critically important longer-term objectives, such as the achievement of the United Nations Sustainable Development Goals. And, as infrastructure practitioners, we must not abandon our efforts to help achieve the infrastructure -related SDGs, in terms of universal access to basic infrastructure services for both economic infrastructure such as transport, power, water and digital services, as well as social infrastructure such as hospitals and schools. The need for these services remains acute, and we must redouble our efforts to achieve the SDG objectives while recognising the new realities that will arise in the post-pandemic world.

Recently, many infrastructure strategists – including Thomas Barret, Chairperson at OECD Infrastructure Governance Forum in today’s keynote address — have promoted the concept of ‘Building Back Better’. Indeed, I believe that there is some sort of election currently going on in the United States in which the opposition candidate has adopted that idea. But what do we mean by ‘building back better’? I suggest that what the idea should mean is a commitment to pay close attention to the quality of the infrastructure we are building.

And this is what brings me to the G20’s approach to achieving the infrastructure-related SDGs, as raised by Natalia. As Thomas Barrett (OECD) also noted this morning, the G20 has, for the last few years – beginning in 2015 under Turkey’s G20 Presidency – been focusing on the quality of infrastructure investments. This focus ultimately led to the G20 Leaders formally approving, last year, the Principles for Quality Infrastructure Investment, also known as the QII Principles.

But what, exactly, are these QII Principles, and how do they relate to the SDGs?

There are six main QII Principles, as follows:

  • Principle 1 is to Maximise the positive impact of infrastructure to achieve sustainable growth and development. This principle directly incorporates the UN’s 2030 Agenda for Sustainable Development, under which the SDG goals were articulated.
  • Principle 2 is to Raise Economic Efficiency in view of life-cycle cost. This involves taking into account all phases of the life-cycle of an infrastructure project, including planning, construction, operation, maintenance and disposal.
  • Principle 3 calls for the Integration of environmental considerations in infrastructure investments, by taking into account the positive and negative impacts of infrastructure projects on ecosystems, biodiversity, climate, weather and the use of resources.
  • Principle 4 speaks to Building resilience against natural disasters and other risks, and the need to create comprehensive disaster risk management plans which inform the design and operation of key infrastructure facilities. Of course, as Thomas mentioned, Turkey unfortunately knows all about the importance of resilience, as was demonstrated by the recent tragic earthquake near Izmir.
  • Principle 5 is the Integration of Social Considerations in infrastructure investment, and it urges the adoption of policies that provide open access to infrastructure services on a non-discriminatory basis.
  • Finally, Principle 6 addresses the need to Strengthen Infrastructure Governance, in terms of the government institutions and processes that impact on the planning, procurement and management of infrastructure investments.

This last principle is, in my view, particularly important. Very recently, both the World Bank and the IMF have emphasised the relationship between good governance and the efficiency of infrastructure investments. In this regard, I would particularly recommend taking a look at the new book which the IMF produced in September, entitled Well Spent – How Strong Infrastructure Governance Can End Waste in Public Investment, which can be freely downloaded from the IMF’s website.

The important point is that the G20, alongside the United Nations and organisations such as the World Bank and the IMF, is now focusing clearly on the practical problems associated with achieving the infrastructure-related SDGs by 2030 – and this focus is demonstrating the importance of infrastructure quality and infrastructure governance, as key elements in the achievement of the SDG objectives.

Hulya, based on your experience in Turkey plus in various developing countries you have been working with, where do you see the gaps for achieving a better sustainability in the PPP governance, particularly from the public finance and the financiers’ side (i.e. project prioritization, policy alignment, etc)? What needs to be done and where the policies to be re-shaped?  project screening and preparation phase? 

Hulya: I wish to elaborate on what Mark has just presented but in terms of public perspective. Our priority is to understand how sustainability contribute to the the success factors of the public services. Here we are taking about hard/soft infra sectors, the service facilities in investment policies. This all relates to the global development efforts. Politicians and the public authorities are setting the trends and goals of sustainability in their development agenda  and these goals need to be achievable ones.

Considering the project life cycles the critical perspective and the responsibility is in the public side when it comes to the project preparation and the project availability for the private sector. Let me elaborate a bit. When you are working on a country diagnostic study, the first ever thing to understand that country is to look at the high level policy documents.  You will screen the development plans and the high-level investment plans of a country.

The related strategies, goals and targets are all very inter-connected and there is an aim to decrease the existing infra gap with fostering the economic growth with investment. Considering the sectors one by one, I believe we have a new paradigm with the COVID that the priorities have been changed in the public services. I was in Kathmandu (Nepal) last year to support the Investment Authorities for PPP policies. We were drafting the PPP guidelines. The key sectors identified were tourism, energy and transportation when we were discussing the procurement parameters for the candidate airport project. But during COVID pandemic, we start discussing the remote education facilities and healthcare service. This is a remarkable shift in all such discussions. This is the demand side key shift that we face with. The needs are changing.  Coming to the supply side, yes, we know that the public money is limited. Especially now, the resources are more limited with the slowdown in the economy and the urgent budgetary expenditures. This increases the importance of the private sector participation which will also trigger the effective usage of resources including the time  saving!

We need to identify how PPPs may help to close infrastructure gaps and inequalities and seek suggestions from PPP experts to improve:

  • poor planning and project selection: analysis, technology and innovation;
  • inefficient delivery: life cycle management and long-term perspective;
  • limited public resources: private financing.

We need to encourage further discussions on best practices in PPP preparation with the aim of creating a knowledge that could assist governments in doing better PPPs. 

Another consideration: some candidate PPP projects are better in terms of financial viability including the affordability and revenue generation capabilities. However, considering the sustainability and the SDG, there is an increasing demand to showcase the social benefit of the projects.

So, if the key consideration is time (which is more important than money nowadays), the social impact of a project is more critical to highlight the importance of the private sector engagement. All these prioritization shifts also impact the project screening and preparation aspects.

This is also good to see that in the last decade there are plenty of new cases of the ESG -compliant projects and I am sure we will be able to hear more from the speakers in the forthcoming sessions where the real cases and country examples to observe that shift will be demonstrated.

The countries and decision-makers should look at the changing world on how they can integrate better the PPP governance and sustainable development. We have seen plenty of good examples during the last 8 months.

Hulya, where you see the differences in the policies and approaches across the countries related to integration and implementation of the SDG goals within PPP projects? Does it increase the complexity of PPPs? How we can facilitate a better stakeholder engagement in PPPs to foster the implementation of Sustainable Goals?

Hulya: Every country has a different way of doing business, which shapes their the political decision making and even technical valuation and criteria settings.Moreover, it is also very crucial who will hold the flagship of SDGs. It is very clear that the governments and public agencies are the key players in leading SDGs.

Happy to see that the private sector who have more integrations with the public side is  more  and more focusing on the social and development-oriented strategies in their corporate activities.  This is a really good pick for these big scale private sector players having a dominant role which puts people in the centre of all these decisions.

I have been intensively working with the South Asia countries in the last two years and have witnessed that the social benefits and the impact of an infra investment iare very important for the politicians to demonstrate to the public to proof the effective public money spending.  This also relates to the transparency. We observe these sensitivities also in the local level. This also yield an increase in the social infra sectors as top priority in the developing countries.

The key challenge is the local capacity and domestic resources needed both for technical and financial capabilities. The countries who also connect their local development with private sector solutions in terms of domestic mobilization also have a better development impact , especially in mitigating the foreign exchange rate risk and country risks.

Attracting long term investment in private financing is also very crucial for these countries and the

  • tariff regulations,
  • pricing policies,
  • government support tools,
  • creating an enabling environment for the foreign investors like
  • step in rights and arbitration

– are all key elements that require further consideration.

Hugues, you have a lot of practical experience on the ground in Africa, especially with governments and project sponsors. What are the actual trends regarding the inclusion of social impact in infrastructure projects in Africa?

Thank you, Natalia. I would also like to warmly thank the organization of the Istanbul PPP Week for inviting me and especially Dr Eyup Vural Aydin. For sure we would have preferred meeting each other’s in persons and enjoying the view on the Bosporus but for the time being we mainly enjoy our home offices views!

Whereas Africa has been apparently less impacted than others continent by the Covid 19 virus, the current pandemic reveals the weakness of most of African countries as they either depend on importations of goods from outside or rely on exportations of their oil and gas productions. I would like here to remind a few facts:

  • 600 million Africans do not have access to water;
  • the amount of funding needed to achieve the Sustainable Development Goals (SDGs) by 2030 would exceed € 150 billion per year;
  • less affluent and / or isolated social classes are the most affected;
  • investors logically focus on creditworthy and easy-to-serve clients, which excludes the less fortunate and the most landlocked;
  •  Projects affecting a large population – therefore less solvent – are more difficult to finance.

Hence it is urgent to modify the scope of all infrastructure projects to include populations that are less easy to serve, and at the same time finding financial making projects dedicated to make them viable.  

Hugues, could you give us concrete examples on the extent of which infrastructure projects in Africa are modified/adjusted to take into account those social, sustainable and environmental criteria?

Absolutely. The priority list of infrastructures that needs to be addressed is the following :

  • drinking water and sanitation
  • electricity and energy
  • health and education
  • transport and communications

For example :

-a mining train which, although it may find its profitability by its sole mission of evacuating metals or minerals, it can become a structuring axis for entire regions by ensuring passenger trains with adapted (and probably subsidized tariffs) .

– dams are more and more designed to also benefit the surrounding populations, partly as compensation for the nuisance of the building, partly with the consequence of a much greater social acceptability of the entire project.

– off-grid electrical service models are increasingly available, thanks to photovoltaics and mobile phones; the move to a larger scale requires additional capital, and therefore, upstream, studies showing the profitability for the investor, and its conditions. Other specific modes of production or distribution have been developed, in Africa and elsewhere, often thanks to non-profit funding (international aid, NGOs, foundations, CSuR, etc.): shared transport, autonomous management of wells or fountains, multifunctional platforms, subsidized tariffs.

Mark, do you think there is a need to streamline the practices across countries and donors. How should take a lead on that?  Would you please elaborate on this?

Mark: Well, Natalia, your question is a provocative one – because it points to a basic flaw in our system of dealing with international challenges – particularly challenges, like the achievement of the SDGs and the issue of climate change, which require collective action by multiple countries.

Of course, the SDGs are a product of deliberations at the United Nations, and there was a consensus of countries in support of the SDG goals. However, the UN has, historically, struggled to mobilise countries to act on their commitments. In short, it’s fine to agree on aspirational goals, but they are meaningless unless countries actually implement their promises.

Indeed, in response to the long-standing perception that it is very difficult for the United Nations to force countries to honour the commitments which they have made, various states have created other groupings and organisations to take collective action. That was one of the reasons behind the establishment of the G7 Group and, when the G7 was found to be too narrow, a decision was taken to create the G20.

Interestingly, the G20 Group brings together not only advanced economies, but also emerging market countries, such as Indonesia and South Africa. And this gives the G20 a certain ‘moral legitimacy’ in terms of  acting as a coordinating agency. Also, the members of the G20 have significant influence on the boards of directors of the major development organisations, such as the World Bank, the Asian Development Bank, the African Development Bank and their various sister institutions.

Accordingly, I believe that the G20 can and should play a key role in coordinating sustainability practices across countries and onerous – and that is why I wanted to provide some details, in my earlier remarks, on the direction that the G20 is currently taking in regard to quality infrastructure investments.

Natalia Korchakova-Heeb: Thanks a lot for your insights and interesting discussion. Hope we provoked some thinking and inspire our audience to integrate SDGs and make infrastructure projects more sustainable.   Let me close  the session. We wishing our participants a good continuation of the conference.

PPPHealth4All Persona – Askar Khoroshash, General Manager – Medical Component Coordinator, PPP Project Office of the Ministry of Health of the Republic of Kazakhstan

Askar Khoroshash General Manager - Medical Component Coordinator PPP Project Office Ministry of Health of the Republic of Kazakhstan

Mr. Khoroshash, during the Second PPP Investment Forum in Kazakhstan (15 October 2020),  you have presented together with Kanat Tosekbaev, General Director of the Republican Center for Health Development the pipeline of PPP healthcare projects in Kazakhstan during a session “Prospects of using off-take argeements for healthcare PPP projects”. Could you please describe main activities of the PPP Project Office?

The Project Office of the Ministry of Health of the Republic of Kazakhstan  for priority healthcare PPP projects was established in 2019 and consists of a medical team, a technical team, and a team of project managers. Currently there are 10 specialists working in the Project Office, including 1 Chief Manager, 1 PPP Consultant, 5 Project Managers, 1 Legal Support Specialist and 2 Medical Specialists. Our experts take part in every stage of the PPP healthcare project preparation, namely in:

  1. development of project documentation phase–ensuring the quality of planning of the medical component, assistance in introducing amendments to regulatory and legal acts, preparation of sectorial and economic conclusions, initial examination of project documentation, interaction with national and foreign companies.
  2. procurement phase – assistance to the Ministry of Health in procurement procedures, preparation of a tender dossier, consultations with potential private partners, initial screening of technical proposals.
  3. contract Agreement with a private partner – assistance in entering into government obligations and reviewing the project agreement.

What PPP projects are currently supervised by The Project Office?

Let me mention some examples:

  1. Construction of a 300-bed multidisciplinary hospital in Karaganda at KSMU;
  2.  Construction of a 300-bed multi-field hospital in Almaty at KazNMU;
  3.  Construction of a 1265-bed Joint University Hospital in Almaty at KazNMU;
  4.  Construction of a 500-bed multi-profile regional hospital in Petropavlovsk;
  5.  Construction of a 600-bed multidisciplinary hospital in Nur-Sultan.
  6.  Construction of a 600-bed multidisciplinary hospital in Turkestan. 

How is from international donors are supporting development of healthcare PPPs in Kazakhstan?

In December 2019, the Kazakhstani government and the European Bank for Reconstruction and Development (EBRD) signed a Memorandum of Understanding on the implementation of a Comprehensive Program for the Modernization of Healthcare Infrastructure in Kazakhstan. The program envisages the construction of up to 19 new hospitals to replace 40 outdated existing facilities and the upgrade of up to 50% of the hospital bed capacity in Kazakhstan as part of the State Health Care Development Program for 2020–2025. I would like like also ackhowledge support of the Asian Development Bank and the World Bank for supporting healthcare reforms in Kazakhstan.

Many thanks for your time and let me wish you and your colleagues successful continuation of your work on healthcare PPPs in Kazakhstan!  Interview by Natalia Korchakova-Heeb, Founder of PPPHealth4All

'Off-take agreements"

PPPHealth4All Persona-Dr. Eyup Vural Aydin, Istanbul PPP Center of Excellence

We talked today with Dr. Eyup Vural Aydin,  the Chairman of the Istanbul PPP Center of Excellence and the Chair of Executive Committee of the Istanbul PPP Week since 2015.
 

Dr. Aydin, this year you are organizing  already the 5th Istanbul PPP Week. Could you please tell us more about it?

Annual Istanbul PPP Week will be held on 2-5 November 2020. This year we are going virtual because of Covid-19. It’s a great opportunity to meet the world’s top PPP experts, high-level decision makers, heads of PPP Units, businessmen and representatives of the leading construction companies. The main topic of this year’s event is “Reshape PPP Together: Infrastructure Economy Beyond the Pandemic”.

This year the Istanbul PPP Week is going to be a virtual event.  What are main changes and new formats?

-We will have interactive sessions. Participants will be able to ask questions to the experts and learn more about the PPP projects. One of the features is that we will have special discussion rooms where experts can gather separately from the other participants. Also heads of PPP Units from the entire world will present their project pipelines  and this will be a great chance for private companies to learn about forthcoming opportunities.

What international organizations will be speaking at the conference this year?

Our speakers are from the government authorities of various countries and representatives of the following organizations: Ministry of Trade of Turkey,  Global Infrastructure Facility, EBRD, IsDB, IFC, IMF, OECD Infrastructure forum, GIHub, Meridiam, DEIK, Istanbul PPP COE and many others.

We are inviting all PPP practitioners and experts to this gathering of PPP community. This year at the event, we will start to our new “PPP Talks” project as well.

Interview by Natalia Korchakova-Heeb, Founder PPPHealth4All

 
Istanbul PPP Week has become one of the top PPP events in the world. We are proud to be partners and support this international conference.

PPPHealth4All Persona – Veronica Vecchi

Today we are talking to Prof. Veronica Vecchi, 
member of PPPHealth4All. Veronica is Professor at
Bocconi University School of Management (Sda Bocconi)
- 3rd top business school in Europe according to the
FT ranking, where Veronica teaches Business
Government Relations and is director of the Executive
MBA at Sda Bocconi India Center, the off shore campus
of Bocconi in Mumbai. She has published numerous
publications and articles on PPPs in the healthcare
sector.

What is in your view the specifics of healthcare PPPs compared to other PPPs?

We can approach public private partnerships in two ways.  PPP have been used so far mainly to design, finance, build and operate large hospitals in many countries with contested results, especially because of a lack of affordability due to weak financial, project management, and strategic skills in the public sector and the choice to include many non-core services in the transaction. The latter resulted in quite large contracts with a limited risks transfer, which, instead, is the essential feature of a PPP project. In the last 15 years I’ve been involved in structuring and renegotiating many PPP projects in Italy and I’ve worked closely with many scholars within the academic 3P network; this has allowed me to combine theory with practice and to develop a new approach to PPP in health, which I called PPP light, whose features are well described in my recent paper  (PPP in Health Care—Trending Toward a Light Model: Evidence From Italy, published by Public Works management and policy).

The essence of the light model is the fact that a PPP contract in health must be designed by looking at the main goal to be achieved, thus avoiding to include peripherals that may increase the contract complexity and information asymmetry, which can undermine a correct risk allocation, because of the ramified web of subcontracts. Therefore, when the need is to build a new hospital, my suggestion is to include in the contract only essential activities such as design, building, maintenance and energy management, which are services strictly related to the need of a new/renewed hospital building. A PPP light can be applied also to the installment and operation of medical equipment or to small parts of hospitals, such as high intensity care units.

From a second and wider perspective, public – private collaborations can be seen also in the medical device field, with the development of value based contracts, or for the delivery of innovative services, based on digital transformation and internet of things. When PPP is applied to services, rather than cement, there is a greater opportunity to link the payment to the economic operator to the achievement of certain results, not only in terms of efficiency but also in terms of effectiveness.

What are the lessons learnt and impact on COVID-19 for healthcare PPPs?

In my perspective we need a twist in the way in which PPP is used in health. One of the lessons we can take from Covid-19 pandemic is the opportunity to move healthcare procurement towards a more strategic approach, where public-private collaboration can play a significant role to develop more resilient healthcare systems. Indeed, during the emergency, “hastily-generated” partnerships have bloomed. They are not only fundamental to ensure resilience in outbreaks; they can also pave the way for the creation of collaboration and trust to move public procurement towards a more strategic approach and to develop partnerships on a larger scale. Policy-makers should reflect on which areas of procurement would be less affected during the outbreak if previous partnerships existed with market suppliers, by comparing flexibility, rapidity and business continuity offered by contractual agreements based on different levels of collaboration. This issue has been developed in a paper published by the American Review of Public Administration (Medical Supply Acquisition in Italy and the United States in the Era of COVID-19: The Case for Strategic Procurement and Public–Private Partnerships) and in a short note published by the World Economic Forum.

What has to be done to improve PPPs in the healthcare sector?

To get the most from public-private collaborations we need not only new management competence to move procurement from a compliance-based perspective into a risk-management perspective, but also a new strategic approach to procurement – when the public sector behaves as a sophisticated buyer and where procurement is used also to achieve policy goals, such as business resilience, innovation and the creation of national/European production.

A new set of skills is required not only in the public sector but also in the private sector,  to generate a common playing field fundamental to develop trust and therefore to co-create more sustainable, balanced and innovative partnerships.  In this landscape, I think that women could play a salient role, therefore it is welcome any attempt to develop networks of women who can contribute to the development of this renewed approach to PPPs in health.

What could be your added-value to PPPHealth4All ecosystem?

 I believe that the role of women is crucial for more sustainability
in healthcare procurement and PPP and wish to contribute to the
establishment of an international women network  in this field to
exchange experiences and disseminate good practices. With reference to the latter, best practices should be applied with great attention to the contexts’ specifics to avoid mistakes already done, especially when many countries imported the anglosaxon PPP model. 

Thanks a lot! We wishing you a lot of success in your work! Interview by Natalia Korchakova-Heeb, founder of PPPHealth4All
 
The list of articles published by 
Prof. Veronica Vecchi:

Vecchi V., Hellowell (2018), Public Private Partnership in the healthcare sector, Palgrave Pivot

Colla P., Hellowell M., Vecchi V., Gatti S., (2015), Determinants
of the price of equity in hospital private finance initiative projects,
Health Policy

Hellowell, M., & Vecchi, V. (2015). The Non-Incremental Road to Disaster? A Comparative Policy Analysis of Agency Problems in the Commissioning of Infrastructure Projects in the UK and Italy Journal of Comparative Policy Analysis: Research and Practice, 1-14

Vecchi V., Hellowell M., Gatti S., (2013), Does the private sector
receive an excessive rate of return from investments in health care
infrastructure? Evidence from the UK. Health Policy, 110 (2-3): 243 –
270

Hellowell M., Vecchi V., (2013), Better deal from investors in public
infrastructure projects: insights from capital budgeting. Public
Management Review, 15(1): 109-129