Gaziantep Hospital PPP

Location:

Turkey

Project number:

45199

Business sector:

Municipal and environmental infrastructure

Notice type:

Private

Environmental category:

B

Target board date:

19 Oct 2016

Status:

Disbursing

PSD disclosed:

26 Aug 2016

Translated version of this PSD: Turkish

Project Description

The EBRD is financing the infrastructure of an integrated health campus, a public private project (PPP), in the province of Gaziantep, Turkey pursuant to a 28 years concession awarded by Turkey's Ministry of Health. The project will include the design, construction equipment and maintenance of the health campus. 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 ca. EUR 600 million.

Project Objectives

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.

EBRD will demonstrate new ways of financing by promoting the participation of untapped investor classes in the Turkish Hospital Facilities Management PPP Programme, focusing on institutional investors and international strategic investors (Samsung C&T and Salini).

Transition Impact

The Project's transition impact stems from the following key areas:

1. Demonstration effect of new ways of financing, procuring and operating hospital infrastructure: The projects under the Programme are structured on a Design-Build-Finance- Lease-Transfer ('DBFLT') basis with strong demonstration effects for the rest of Turkey and other countries in the region, by promoting the use of PPP contracting, and demonstrating good practice in international PPP standards.

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. Setting new business standards: The project is expected to achieve high standards of business conduct by constructing a modern hospital infrastructure based on international standards, implementing performance based compensation scheme and monitoring quality.

4. Demonstration effect of new ways of financing by promoting the participation of untapped investor classes (institutional investors, strategic investors) in the Programme: The EBRD involvement is focused on supporting the entry of untapped investor classes (international and local institutional investors, international strategic investors) into the financing of the on-going hospital PPP programme in Turkey (which to date has largely been dominated by Turkish investors, IFIs and commercial banks). EBRD aims to help the Programme gain recognition from institutional investors, which will be important for its sustainability. By doing so, EBRD will have an instrumental role by mobilising sustainable and diversified funding sources and providing depth to a maturing PPP programme.

Client Information

GAZIANTEP HASTANE SAGLIK HIZMETLERI ISLETME YATIRIM ANONIM SIRKETI A.S. The client is Gaziantep Hastane Saglik Hizmetleri isletme Yatirim Anonim Sirketi A.S., a special purpose company that will supply and maintain hospital facilities under the PPP scheme, while the provision of medical care will remain the responsibility of the Ministry of Health. The client is owned by Samsung C&T Corporation, Kayi Insaat Sanayi ve Ticaret A.S., Salini Impregilo S.p.A. and a private equity investment fund ("PEIF"). The investors in the PEIF comprise mostly Korean and Turkish institutional investors.

EBRD Finance Sumary

EUR 80,000,000.00

EBRD A loan of up to EUR 80 million. The EBRD financing will be in parallel with facilities from export credit agencies, other international financing institutions, commercial banks and institutional investors.

Environmental and Social Summary

The project has been categorised B in accordance with EBRD's 2008 Environmental and Social Policy. The environmental and social due diligence ("ESDD") including an environmental and social analysis of the project has been undertaken to assess the project's compliance with EBRD Performance Requirements. The ESDD showed that the project will provide an important social infrastructure and improved health services to the population and that it will result in limited and localised environmental and social ("E&S") impacts, which can be addressed by adhering to the mitigation measures included in an Environmental and Social Action Plan ("ESAP").

Under the current Turkish EIA Regulation, no EIA is required for hospital projects. However, the Company commissioned independent consultants to carry out a comprehensive Environmental and Social Impact Assessment ("ESIA") inclusive of public consultation meetings of the project. Non- Technical Summary ("NTS"), ESIA, ESAP, and Stakeholder Engagement Plan ("SEP") for the project have been disclosed at the Project website . During the consultation meetings the responses have been largely positive and strong support has been expressed for the project in expectation of improved healthcare services and local job creation. The main concern raised is the location of a high school located adjacent to the project site. The school is aware of the grievance mechanism and can directly raise any concerns they may have during construction.

The Company is currently engaging with the competent authorities to secure the environmental permit for the healthcare campus and confirm whether some of the associated facilities would require an EIA. Due to their scale and nature, it is expected that the tri-generation plant (with capacity of 17.5-18 MWth) and boilers (approximately 40 MWth) and concrete batching facility (two plants each with a capacity of producing 120 m3 per hour) will be classified as 'Annex 2' projects under the EIA regulation, exceeding the 20 MW and 100 m3 per hour limits for tri-generation/boiler capacity and concrete production capacity, respectively and may therefore need a local EIA. Securing the environmental permits will be covenanted in the project agreements.

The main potential impact of the project will be the increase in traffic volumes during construction and operation. In addition to the Traffic Management Plans for construction and operation, safety awareness campaigns will be undertaken with local residents and with the neighbouring school. Ongoing stakeholder engagement will be undertaken to monitor how Project related traffic is affecting local residents. The Company will also coordinate with the Transport Coordination Centre of Gaziantep Metropolitan Municipality to the extent possible on traffic management and route selection.

Another key issue during both construction and operation will be waste. The Waste Management Plan will cover both hazardous and non-hazardous waste with provisions for waste minimisation, segregation, labelling, storage, transportation, recycling and disposal to meet national regulatory requirements and international standards.

During operation, emissions from the tri-generation plant and boiler plant will be controlled through optimising design, increasing stack heights and use of combined stacks for the tri-generation plant and boiler plant and a reduction / improvement in the oxides of nitrogen emission concentration. The GHG emissions from the project are estimated to be 138,644 tonnes of CO2 per year. Annual reporting on GHG emissions will be required.

Life and Fire Safety and Emergency Response will be addressed by a third party life and fire safety audit. Regular life and fire safety exercise and maintenance check in accordance with adequate procedures are required during the construction and operation. Security for the 100- bed High Security Forensic Psychiatric 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.

In order to ensure that the social and environmental issues identified during the assessment are effectively managed, an ESAP has been developed that requires a series of environmental and social management and monitoring plans ("ESMMP") to be prepared and implemented. The key elements of the management plans are provided in an over-arching framework ESMMP. The Company, together with their contractor, will be required to use this framework ESMMP as a basis for developing detailed management plans and implementing them from the start of construction. These will include, at a minimum, Air Quality Management Plan, Camp Management Plan, Chance Finds Procedure, Construction Management Plan, Emergency Preparedness and Response Plan ("EPRP"), Grievance Mechanism, Hazardous Material Management Plan, Health Campus Traffic Plan, Human Resources Policy, Noise and Vibration Management Plan, Occupational Health and Safety ("OHS") Management Plan, Patients' Rights Charter, Security Plan, SEP, Traffic Management Plan and Waste Management Plan. The management plans developed for the Project will be practical and fully integrated into the Company's Environmental and Social Management System ("ESMS"), which is in development. The ESAP also addresses contractor management, infectious disease control during the operation, radioactive substance management, effluent control and treatment, construction worker temporary accommodation, security issues, updating and implementing SEP, and environmental and social monitoring of the Project.

Non-technical summary

Technical Cooperation

A technical co-operation ("TC") assignment for environmental, health and safety capacity building for construction contractors is envisaged under the project.

Company Contact Information

Gaziantep SPV, Chief Operation Officer: Valeria Travaglini

v.travaglini@salini-impregilo.com 
+90 212 2846080/1
http://gaziantepihcproject-com.jimdo.com

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