96888 PUBLIC-PRIVATE PARTNERSHIPS BRIEFS Egypt: Alexandria University Hospitals Photo: Nasser Nouri/Creative Commons license, creativecommons.org/licenses/bysa/2.0 Overview Egypt, the most populous country in the Arab world, has a well-respected system of medical education, but has difficulty delivering high-quality medical care because of inadequate hospital facilities. To tackle the problem, the government of Egypt sought IFC’s assistance in the country’s first public-private partnerships in the health sector to design, build and operate two new specialty teaching hospitals. These will be located at Alexandria University, a leader among Egypt’s educational and healthcare institutions. The concessions were signed on April 30, 2012, and are expected to be ready to receive patients in 2014. An international consortium led by Bareeq Capital, an Egyptian private equity firm focus- ing on social infrastructure projects, together with local and international partners, G4S, Siemens and Detac, won the 20-year concession contracts for two new hospitals in Alex- andria, Egypt’s second largest city. Smouha Maternity University Hospital is planned as a 200-bed gynecology and obstetrics center with a blood bank facility, while the Mowassat Specialized University Hospital will be a 224-bed facility providing neurosurgery, urology and nephrology services. Both hospitals will serve the current and future needs of the ex- pected patient population, as well as provide a strong foundation for the clinical teaching component of Alexandria University. This series showcases how the World Bank Group supports the development and implementation of public-private partnerships. This support comes in the form of public sector loans, private sector finance, sector and transaction advice, guarantees, and output-based aid. PUBLIC-PRIVATE PARTNERSHIPS - APRIL 2012 Background 20-year concessions. The consortium, led by an Egyptian private equity firm, Bareeq Capital, brings significant Alexandria University provides advanced medical education experience through a strong partnership of local, regional and clinical training for thousands of students from and international partners—G4S, an international security Egypt and through-out the region at several hospitals solutions company, Detac, an Egyptian construction firm, in Alexandria, the country’s second largest city. While and Siemens Healthcare, a global provider of medical clinical and teaching standards are high, the University has equipment systems. Initial capital expenditure for the two a number of issues with the design and maintenance of hospitals totals approximately $225 million, including hospital facilities and equipment. The existing maternity equipment. hospital cannot extend the full range of advanced services required in its current location, while the hospital facilities for neurology and other specialist services are delivered in World Bank Group Role buildings that are over 80 years old and cannot be safely IFC was invited by the government of Egypt to assist adapted for higher standards of patient care and advanced Alexandria University and the Ministry of Finance’s Public medical equipment now required. Even with new hospital Private Partnership Central Unit on all aspects of the PPP facilities, the University requires expert assistance with project, including transaction structuring, preparation of facilities management, medical equipment supply and legal documentation and marketing to potential investors, maintenance. prequalification and assisting in the bidding process. To address these shortcomings, the government looked Together, the Ministry of Finance, Alexandria University to the private sector to design, construct, and equip two and the IFC project team maintained an open and hospitals under two public-private partnerships (PPPs). competitive process that followed best market practices The contracts also require the winning bidder to supply in spite of unforeseen delays and political turmoil. Issues and manage medical equipment and maintain the hospital faced and resolved by the team included changes in project facilities. These new hospitals address pressing needs in structure, personnel, and broad changes in the investment Egypt’s health care sector: climate. IFC’s role as a neutral and committed development • Smouha Maternity University Hospital is planned as a partner facilitated solutions and provided stability 200-bed gynecology and obstetrics center with the city’s throughout the transaction process. first blood bank facility. Improved obstetrics and gyne- IFC has been advising the government of Egypt on the cology facilities are a high priority for Egypt, the most design and implementation of PPP transactions since 2006 populous and fastest-growing country in the region. Both through an agreement with the Ministry of Finance. The hospitals are designed to serve the current and medium- ministry has sought to pilot such projects in the water term future needs for the city’s catchment area of 7.4 mil- and sanitation, transport, as well as education and health lion people. sectors, the first of which was the successful New Cairo • The Mowassat Specialized University Hospital will be a Wastewater PPP. 224-bed facility providing neurosurgery, urology and ne- phrology services. Egypt is facing a crisis in prevention and Outcomes treatment of chronic non-communicable diseases, some of which will be addressed by the services provided at the new • Successfully secures Egypt’s first health sector PPP, hospital. providing healthcare services to a population center of 7.4 million. Project Description • 78,500 unique patients are expected to receive services each year. Each hospital project was bid as a separate contract. The winning bidders were required to finance, design, construct, • Provides modern facilities offering gynecology, obstetrics, furnish, equip, maintain, and provide non-clinical facilities neurology, and urology services, and a state-of-the-art management services for the two new hospitals and blood blood bank. bank in Alexandria under 20-year concessions, after which • Establishes the viability and validity of significant PPP management responsibility and ownership will revert to the projects in building Egypt’s future in a rapidly-changing government of Egypt. political climate. An international consortium of investors and service providers, Bareeq Hospitals Company, won both the worldbank.org/ppp @WBG_PPP scribd.com/wbg_ppp