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IFC-Estado-de-Mexico-PPP

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									       Hospital PPPs
     State of Mexico
IFC Transaction Experience




      1
             The Location: Estado de México
•One of 32 states in Mexico
•Population 14.4 million




                              2
    The Client: ISSEMyM                             IFC Mandate
•State social security agency for         • Initially IFC was hired to
 state employees                            implement PPPs for a newly-
• Health insurance and services for         opened oncology center and for
 approx 900,000 people (employees           construction/operation of a new
 + families)                                tertiary hospital
• Network of 82 primary care              • IFC analysis showed
 centers, 10 secondary hospitals, 4            Oncology center could be
 tertiary hospitals                             optimized by contracting w/
                                                other insurers for utilization,
                                                without need for a PPP
                                               No need for proposed tertiary
                                                hospital
                                               Need for two new 120-bed
                                                secondary hospitals – via PPPs




                                      3
                       PPP Transactions
Project
• New 120 bed regional secondary hospitals in Toluca and Tlalnepantla
• Estimated investment of $48 million (Toluca) and $57 million (Tlalne)
Structure
• Operator is responsible for design, construction, financing, equipping,
  facility management, non-clinical services, and selected clinical
  services (dialysis, labs, imaging) under a 25 year contract
• The public sector will be responsible for hospital management & other
  clinical services
• The private sector operator will receive a fixed payment and a
  variable payment related to performance

• PPP operator assumes risk for:
     Cost of consumables
     Replacement of medical equipment



                                     4
                                     Bidding
• Sequential bids for Toluca (Sept/10) and Tlalnepantla (Oct/10)
• Three-step bidding evaluation

    Technical &                                          Financial Bid
      Financial                     Concept Design
                                                         (PPP payment)
       Criteria
Must exceed thresholds             Pass/fail vis-à-vis   Lowest wins
                                  functional specs

• Toluca bid:
        3 bidders (all passed)
        Prodelmex won


•Tlalnepantla
      4 bidders (3 passed)
      Marhnos won



                                             5
Hospital Concept Designs




           6
                     Implementation Issues
State’s PPP law requires EACH
                                      12-month delay in submitting to
project to be approved by State
                                      Legislature
Legislature.



Tlalnepantla location hampered
                                       Design changes & obligation to
by limited space and existence
                                       include new clinic
of clinic & communications
tower


Bidders reluctant to take               Risk transferred but mitigated
consumables & equipment                 with caps
replacement risk




                                  7
                           IFC’s Value Added
                                          Investor Confidence

Project Selection & Justification         IFC’s presence
                                           enhanced bidding competition
 Recommended different projects           gave confidence to operators
 Sizing to meet client needs &              re: bankability/ sustainability
   fiscal limits
 Reports to State Legislature




                                          Bidding Procedures
                                            Simplified bid criteria &
                                             evaluation
                                            Recommended max price
                                             to client



                                    8

								
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