Public-Private Partnership Stories Nigeria: Cross River State Hospital Illustration © Cuningham Group of Architects Cross River State, with just over 0.5 hospital beds per thousand people, has the lowest density of hospital infrastructure in the South-South region of Nigeria. While there is nascent private sector involvement in the health sector, most health care delivery is provided by the state; however, the network of public sector hospitals and health care centers does not meet the region’s needs. The government of Cross River State hired IFC as lead transaction advisor to support the structuring and implementation of a public-private partnership (PPP) for a new referral hospital in the capital city of Calabar that will deliver an affordable international standard of health care for the state. A 10-year concession was awarded to UCL Healthcare Services Ltd, an international consortium comprising Utopian Healthcare Consulting (U.S.), Cure Hospital Manage- ment Services (U.S.), Cuningham Group (U.S.), Consultants Collaborative Partnership (Nigeria), ITB Nigeria Limited (Nigeria), HealthFore Technologies (India), and Simed International (the Netherlands). The consortium will bear some project development costs, deliver a turnkey hospital, and will be responsible for operating the hospital under the terms defined in the PPP agreement. The PPP agreement was signed on June 24, 2013. The hospital will be operational in 2015. This series provides an overview of public-private partnership stories in various infrastructure sectors, where IFC was the lead advisor. The hospital is expected to provide high quality advanced secondary IFC Advisory Services in clinical and diagnostic services to the citizens of Cross River State, Public-Private Partnerships 2121 Pennsylvania Ave. NW particularly to the citizens of the greater Calabar area. Washington D.C. 20433 ifc.org/ppp BACKGROUND be financed by the state government. The consortium will bear The hospital facilities in Cross River State are inadequate: in some project development costs, deliver a turnkey hospital, and addition to deteriorating infrastructure and a lack of skilled staff, will then be responsible for running the hospital operations under the facilities lack advanced medical equipment. As a result, the terms defined in the PPP agreement. At the end of the concession quality of public health care services is sub-optimal. Moreover, the period, the facility will be transferred to the government. The population perceives the quality of healthcare as poor, resulting hospital will be managed as a state referral hospital, providing in a loss of confidence in the facilities, a greater reliance on self- quality and affordable access to regional level clinical services. medication, and an exceptionally high rate of medical evacuations to other countries. The lack of advanced diagnostics is a serious BIDDING problem and patients are often forced to travel to neighboring Fifteen international firms responded to an invitation for states for imaging services; there is also limited access to quality expressions of interest issued by the government in April 2012, high-risk obstetric care, intensive care units, and to emergency/ and four of these firms were prequalified. Two bids, comprising trauma care. technical and financial proposals, were ultimately received. The With a population of approximately 3.4 million people, a shortage consortium led by UCL Healthcare Services presented the lower of doctors exacerbates the state’s healthcare problem. Apart financial bid and was awarded the contract. The consortium from the federally-funded teaching hospital, only 36 doctors includes, among others, Cure Hospital Management Services, a and 938 nurses employed by the state cover the state’s secondary U.S.-based firm which will provide clinical services, and Simed health facilities. This number translates into an alarming doctor- International, a Dutch firm which will deliver the medical population ratio of 0.21 doctors per 10,000 patients—one-fifth equipment. of the Sub-Saharan African average. To confront these challenges, the Cross River State government proposed the establishment of a 105-bed referral hospital to serve the needs of the capital city, Calabar, and its environs. A gateway clinic will be included, offering primary healthcare services and a solid referral mechanism for the PPP hospital, ensuring that only EXPECTED POST-TENDER RESULTS patients requiring secondary care are admitted to the hospital. The government sought IFC’s support to attract the participation • The hospital is expected to provide high quality of qualified private sector firms in the design, construction, advanced secondary clinical and diagnostic services equipping, and management of the proposed hospital through a to the citizens of Cross River State, particularly to transparent tender process. the citizens of the greater Calabar area. • 66,000 expected unique patients per year. IFC’S ROLE • The hospital will play a role in the state govern- In September 2011 the government of Cross River State engaged ment’s overall growth strategy by creating jobs. IFC as lead transaction adviser to help implement all aspects of the PPP project. IFC conducted a detailed feasibility study to • Health professionals in the state will build expertise determine how private participation in the proposed facility could through exposure to international best practice. improve healthcare outcomes. IFC recommended seeking a private operator through a competitive tender to design and construct the 06/2013 hospital, and to manage all clinical and non-clinical facilities. IFC worked closely with the government to structure and implement the transaction, guiding the government through a transparent tender process, including the preparation of PPP contract documents, evaluation of technical and financial bids, and signing of the final contract agreement. TRANSACTION STRUCTURE The 10-year project term will include up to two years for construction and eight years for operation. The hospital is anticipated to be operational in 2015. The construction and equipping of the hospital, totaling approximately $37 million, will