Adana Hospital PPP Project

Location:

Turkey

Project number:

45707

Business sector:

Municipal and environmental infrastructure

Notice type:

Private

Environmental category:

B

Approval date:

17 Sep 2014

Status:

Repaying

PSD disclosed:

20 Jun 2014

Translated version of this PSD: Turkish

Project Description

The EBRD is considering financing a hospital infrastructure PPP project involving the design, construction, equipping, financing, and maintenance of an integrated health campus in Adana, Turkey, pursuant to a 28 years concession awarded by Turkey’s Ministry of Health. Under this PPP structure, the Concessionaire will supply and maintain the hospital facilities, while the provision of medical care and services will remain the responsibility of the Ministry of Health. Total project costs are estimated at circa €460 million.

EBRD will assist in increasing private sector participation in the hospital infrastructure sector in Turkey. In response to the need for large capacity investments in healthcare systems, governments are seeking to tap private sector resources and know-how to construct and manage infrastructure related facilities more rapidly and more efficiently, while medical service provision remains under the responsibility of the state.

Transition Impact

The transition impact of the Project will be derived from three main sources:

  1. Demonstration effect of new ways of financing, procuring, operating hospital infrastructure: The design, build, finance, lease and transfer project has strong demonstration effects in the region, by promoting the use of concession contracting, and demonstrating good practice in international PPP standards. Given current market conditions and the innovative PPP programme, the EBRD can help to provide comfort for other financiers. In addition, the EBRD’s involvement in this project is expected to act as a catalyst for attracting new investors, like Infrastructure Funds. This is the case of Meridiam, who approached the Bank in order to obtain comfort for their first investment in a PPP hospital in Turkey.
  2. Demonstration effect of better value all-in cost service than a public sector alternative: The project is expected to deliver better value from an all-in cost service perspective when compared to the public sector alternative, providing a high value for money to the Ministry of Health. Following a review of the tender documentation and the template PPP contract, the Turkish Hospital PPP programme is seen as effective in procuring hospital infrastructure services.
  3. New business standards: As part of the PPP contract, the project is expected to achieve high standards of business conduct and good practice, including advanced medical technologies and facilities, implementing performance based compensation schemes for the facility manager, and enhance the quality of monitoring quality.

The Client

The client is ADN PPP Saglik Yatirim A.S.,a special purpose company established by a consortium to build, finance and maintain an integrated health campus with 1,550 beds in the city of Adana for an operation period of 25 years following a construction period of 3 years. The consortium is comprised of Rönesans Holding A.Ş. (“Ronesans Holding”), Rönesans Saglik Yatırım A.Ş, (“Ronesans Medical”), a Ronesans Holding subsidiary (together “Ronesans”), Sıla Danismanlik Bilisim Saglik Ins. Tic. A.Ş. (“Sıla”), Şam Yapı Sanayi ve Ticaret Ltd. Şti (“Sam”), TTT Saglik Hizmetleri Egi. Ins. San. Tic. A.S. (“TTT Saglik”) and Meridiam Eastern Europe S.a.r.l. (“MIEE”).

EBRD Finance

EBRD A loan of up to €100 million and a B loan, the size of which remains to be determined. The EBRD financing will be in parallel with facilities from other international financing institutions and commercial banks.

Project Cost

€460 million.

Environmental Impact

The project was categorised “B” by European Bank for Reconstruction and Development (EBRD), which means that an environmental and social analysis of the project and information on existing conditions were required by the Bank, in accordance with the 2008 Environmental and Social Policy and Performance Requirements. The project has some environmental and social impacts which can be readily addressed through mitigation measures and an action plan.

The client completed an Environmental and Social Questionnaire, and this has been reviewed by EBRD environmental and social staff. The Bank’s environmental and social staff undertook a site visit to verify the environmental and social issues and any necessary mitigation measures in March 2013. The client has developed the following documentation in June 2014 both in English and Turkish: Non-Technical Summary (NTS), Environmental and Social Impact Assessment (ESIA), Environmental and Social Management Plan (ESMP), Stakeholder Engagement Plan (SEP) and Environmental and Social Action Plan (ESAP). These documents have been reviewed by the Bank and the lender’s supervisor.

The NTS, ESIA, ESMP, SEP and ESAP package is available at www.pppadanahastanesi.com

Project Site: The project site is located in Yuregir District in Adana Province, in the northern part of the city and a recently developing area. The area of the land plot is approximately 33 hectares. To the north of the project, the Commerce High School is undergoing expansion across a State Hydraulic work (DSI) (Hydrological Directorate) channel from a hydro dam that was built in the 1950s. There is a horse riding centre to the west of the site, across the road. Highway E-90 is adjacent to the site towards the south, and a military base is located beyond the Highway. There is a DSI area to the east of the site. Next to the DSI area, there are TOKI (Housing Development Administration of Turkey) public housing and an elementary school.

The site is currently divided by a 400 meter long access road leading to the E-90 Highway. This access road will be closed down to make the site a single plot, and a new access road will be built by the municipality at the south west corner of the site. As the access road currently has busy traffic, the co-ordination of the closure of the existing access road, project construction, and construction of the new access road needs to be well co-ordinated. The eastern part of the site was formerly used by DSI and there are oil storage tanks and heavy equipment on the site.

Environmental and Social Issues and Mitigation Measures

Environmental and Social Impact Assessment (ESIA)

The client has carried out an Environmental and Social Impact Assessment (ESIA) for the project in accordance with EBRD Environmental and Social Performance Requirements (PR) and IFC Environmental and Social Performance Standards (PS) as well as relevant Turkish law. The project was officially exempted from the national Environmental Impact Assessment (EIA) requirement by the Turkish Ministry of Environment and Urbanisation.

A Stakeholder Engagement Plan (SEP) was developed in October 2013 and will be updated and implemented as the project progresses. The SEP includes a grievance mechanism for the public. The stakeholder consultation activities have included face-to-face meetings with governmental authorities and NGOs, solicitation of opinions from 62 governmental authorities and 50 NGOs on the Project Information Document, and project information packs were sent to headmen of 70 neighbourhoods within a 10 km diameter of the Project area. On 8 November 2013, a public consultation meeting was held on the draft ESIA, attended by 50 people. The client placed the project description and contact email address on their website both in Turkish and English in October 2013.

The Lenders’ environmental and social supervisor has carried out the environmental and social due diligence on the ESIA. It did not identify any critical issues to prevent the project’s further development. An Environmental and Social Action Plan (ESAP) was agreed with the client to address any necessary commitments to comply with the EBRD Performance Requirements and IFC Performance Standards at the time of the due diligence.

Environmental Issues and Mitigation Measures

The client carried out a flora and fauna survey at the project site as well as desk study in 2013. They showed that there are no protected and/or endangered flora and fauna in the project site and surroundings. The project does not impact any biodiversity issues.

The client carried out a geological survey on the site. It indicated that there is no risk of liquefaction in the event of an earthquake. The project’s building is designed according to the Regulation on Building to be built in Seismic zone (Official Gazette 06.03.2007). The client carried out soil and ground water contamination testing in November 2013. The result indicated potential leak from oil drums in the area used by DSI. The potential contamination is limited to the specific area used by DSI and mitigation measures are to be implemented as prescribed in the Environmental and Social Management Plan (ESMP). There are no surface and ground water contamination issues associated with the project.

Mitigation measures for noise, dust and vibration during the construction and operation have been developed in the ESMP. Air emission from construction vehicles will be addressed by dust preventative measures. Air emissions from boiler installation and traffic have been studied by the client in air emission modelling and mitigation measures have been agreed in the ESMP. Traffic management during the construction has been also included in the ESMP. An overall Environmental Management System has been developed in the ESMP for both the construction and operation phases to address emission, effluent, noise, vibration, waste and hazardous substance management issues. Medical waste will be transferred by a licenced entity to the medical waste sterilization unit of the Adana integrated solid waste disposal facility. The medical waste sterilization unit has 8 to 10 tons per day treatment capacity. The plan is licensed by the Ministry of Environment and Urbanisation.

Small amounts of low level radioactive waste from medical testing or instruments during the operational phase, as well as infectious disease control will be strictly handled in accordance with regulations and good international practice and are addressed in the ESMP. The technical aspects of addressing these issues are incorporated into the hospital’s design such as through adequate ventilation systems, leaded doors, separate waste water pipes and other measures. All hospital building design for the PPP hospital projects in Turkey are agreed by the Ministry of Health and in accordance with good international hospital design standards.

At this moment, public bus services are the only public transportation system to access the project site. Transport planning to the project during the operation period will be addressed as the project progresses in accordance with the ESAP. Currently, the Adana Transit Corporation, a municipality operated rail rapid transit system, and Adana Metro which extends 14 km from northwest end to the city centre and on to Yuregir. The second line of the metro is reportedly under construction. However, there is currently no information if a new metro station will be built accessible to the project.

During the ESIA process, an archaeological walkover survey at the project site and a desk research by the archaeology team were carried out. No archaeological remains were found on the site and the desk research determined that encountering artefacts on the project site to be highly unlikely. Chance find procedure satisfying the requirements of PR8/PS8 will nevertheless be adopted and project staff will be trained on chance find procedures.

Social Issues and Mitigation Measures

The project land was transferred by the Treasury to the Ministry of Health. No further land acquisition is required. There are no resettlement issues associated with the Project.

During the construction phase approximately 1,800 workers are expected to work on the site during the peak construction period. While the majority of the workforce will be sourced locally, on-site worker accommodations will be required. The workers’ accommodation will be developed and managed in accordance with the provisions of IFC/EBRD guidance on workers’ accommodation and a construction camp management plan will be prepared and implemented. An Occupational Health and Safety (OHS) management system will be developed in line with OHSAS 18001:2007 – Occupational Health and Safety Management System as well as in accordance with Turkish legislation and international standards including the IFC Environmental, Health and Safety General Guidelines.

Workforce requirements during the operational phase will be approximately 4,500 workers in total, with 2,000 health service personnel to be employed by the Ministry of Health, and 2, 000 service employees to be employed by the Company. A sound worker-management relationship will need to be established and maintained through compliance with national labour legislation and PR2/PS2 requirements. OHS measures will be in place in accordance with Turkish legislation and international standards including the IFC Environmental, Health and Safety General Guidelines and those for Health Care Facilities for the operational stage.

In compliance with EBRD/IFC requirements, an employee grievance mechanism will be developed and it will be extended to non-employee workers. Subcontractors shall comply with PR2/PS2 requirements and before the construction phase, a Workers’ Code of Conduct will be prepared and be applicable to all project personnel. It is not yet clear whether any existing hospitals in Adana will be closed and medical staff reallocated to Adana IHC. If hospital closures will be required, the Ministry of Health will be managing the staff reallocation and any potential retrenchment.

The ESIA process has verified that especially during the construction period, impacts expected on community health, safety and security, are expected to be mostly temporary and can be mitigated. The Construction Camp Management Plan, Traffic Management Plan, Emergency Response and Preparedness Plan and Security Plan will be prepared before the construction phase starts.

Security for the 100-bed High Security Forensic Hospital will be managed by the gendarme as required by the applicable legislation and agreed by the Turkish Ministry of Justice, Ministry of Interior and the Ministry of Health by a tripartite protocol.

Life and Fire Safety and Emergency Response are addressed by a third party life and fire safety audit and master plan as described in the ESMP. Regular life and fire safety exercise and maintenance check in accordance with adequate procedures are required during the construction and operation.

Summary of Environmental and Social Action Plan (ESAP): An Environmental and Social Action Plan (ESAP) has been developed to address the following key issues:

  1. Environmental Management Systems (EMS) during the construction and operation,
  2. Life and Fire Safety and Emergency Response Preparation,
  3. traffic management during the construction and operation,
  4. co-ordination of the municipality’s closure of the existing road at the project site and the project’s construction work,
  5. potential employment impact if any existing hospitals are to be closed due to the project,
  6. Human Resource management plan during the construction and operation,
  7. contractor management during construction and operation,
  8. Occupational Health and Safety during the construction and operation,
  9. Infectious disease control during the operation,
  10. a third party hospital audit and good international hospital management practice,
  11. solid, medical and hazardous waste management,
  12. radioactive substance management,
  13. effluent control and treatment
  14. a construction worker grievance mechanism and employee grievance mechanisms during operation,
  15. construction worker temporary accommodation if it is used in the project,
  16. a patient grievance mechanism and respect of patient’s human rights,
  17. security issues,
  18. updating and implementing SHEP, and
  19. Environmental and social monitoring of the Project.

Details of the ESAP are available at www.pppadanahastanesi.com. The ESAP will be incorporated into the legal documents to ensure that the project complies with the requirements set by EBRD’s Performance Requirements.

Environmental and Social Monitoring: EBRD will monitor the project’s environmental and social performance by reviewing a lender supervisor report, annual environmental and social report and periodical monitoring visits.

Contact Address of the sponsor:

Portakal Cicegi Sok. No:33 Yukari Ayranci
Cankaya/Ankara

Tel: +90 312 441 31 41
Website: www.ronesans.com

Technical Cooperation

None.

Company Contact

Korkut Ersozoglu
Project Manager
Ronesans Saglik Yatirim A.S.

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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Text of the PIP

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