Get your InfraPPP & IPP Journal subscriptions: 25% discount from 10 to 27 September 2019 with the code INFRAIPP25
According to Chilean newspaper, La Tercera, Chile's Ministry of Health has conducted an analysis that shows that construction costs of hospitals carried out under concessions are more expensive than the costs of those built through a traditional method.
More concretely, hospitals under concession in the country are 77.9% more expensive than those built directly with public funds, La Tercera reported.
The recently formed Government of Michelle Bachelet has criticized hospital concessions since taking office two months ago.
Michelle Bachelet is the President of Chile since 11 March 2014. She previously served as President from 2006-2010, becoming the first woman in her country to do so.
Chile's hospital concessions program was part of Sebastian Piñera government's wave of concessioned public infrastructure, which calls for the concession of 11 hospitals between 2010 and 2014, with total investment reaching US$2.2 billion. The program included capital Santiago's Salvador Geriatric Hospital, Félix Bulnes, Sótero del Río and Puento Alto hospitals; region VII's Curicó and Linares hospitals; region VIII's Chillán hospital; and region V's Provincial de Marga-Marga and Biprovincial de Quillota-Petorca hospitals.
In February 2014, Chile's Public Ministries of Works and Health announced that the consortium "Consorcio de Salud Santiago Oriente" formed by Assignia Infraestructura (Spain), Constructora y Edificadora GIA-A (Mexico), and Constructora Cosal (Chile) submitted the best proposal to develop the concession of the Salvador Geriatric Hospital and the National Institute of Geriatrics.
Later in March, Sacyr Concesiones Chile emerged as the preferred bidder for the concession contract of two hospitals in central region V, the Biprovincial Quillota - Petorca hospital and the Provincial Marga Marga hospital .
Now, Chile's health Minister has asked the audit office to halt the hospitals in the process of being awarded, claiming hospital concessions have not proven to be efficient.
If confirmed, it will be a hard hit to the industry affecting numerous international players.