Kocaeli Hospital PPP

Location:

Turkey

Project number:

47406

Business sector:

Municipal and environmental infrastructure

Notice type:

Private

Environmental category:

B

Target board date:

22 Jun 2016

Status:

Disbursing

PSD disclosed:

19 May 2016

Translated version of this PSD: Turkish

Project Description

A hospital infrastructure PPP project involving the design, construction, equipping, financing, and maintenance of an integrated health campus in Izmit District of Kocaeli Province, Turkey, pursuant to a 28-year concession awarded by Turkey's Ministry of Health. Under this PPP structure, the concessionaire will be responsible for designing, building, financing, leasing and operating of the hospital facilities, while the provision of medical care and services will remain the responsibility of the Ministry of Health.

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.

Transition Impact

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

1. Demonstration effect of new and replicable behaviours and activities: new ways of financing, procuring, operating hospital facilities management.

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.

Given current market conditions, and coupled with the fact that this programme is a major pioneering initiative of the Turkish authorities, the presence of the EBRD helps provide comfort for other commercial lenders interested in co-financing the projects. As such, IFI investment during the first phase of the programme is expected to ease the risk perception of the debt providers and help attract sufficient commercial financing to sustain the modernisation agenda envisaged in the PPP programme.

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 effective in procuring hospital infrastructure services.

3. Setting 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.

Client Information

Kocaeli Hastane Yatirim ve Saglik Hizmetleri A.S. is a special purpose company established by a consortium of private companies to design, build, finance, lease and operate the Kocaeli Hospital PPP in Izmit District of Kocaeli Province, Turkey, for an operation period of 25 years following a construction period of 3 years. The consortium is comprised of Turkerler Insaat A.S. (Turkerler), GAMA Holding A.S. (GAMA) and GE Healthcare (GEHC) group company.

The campus is comprised of 1,080 beds across several hospitals, namely general (980 beds), physiotherapy and rehabilitation (100 beds) and high security forensic psychiatric (100 beds).

EBRD Finance Summary

EUR 20,000,000.00

The EBRD is planning to provide A loan of EUR 20 million and B loan of up to EUR 42.7 million.

The Bank's financing will be in parallel with facilities from other international financing institutions and commercial banks.

Total Project Cost

EUR 407,681,953

The total project cost is estimated at circa EUR 407,681,953 which comprises up to EUR 62.7 million EBRD A/B loan as well as financing from other commercial banks and IFIs and the sponsors' equity commitments under 80:20 debt-to-equity structure.

Environmental and Social Summary

The project was categorised "B" in accordance with 2014 EBRD Environmental and Social Policy: an  environmental and social (E&S) analysis of the project and existing conditions assessed the project's compliance with EBRD Performance Requirements. Impacts identified can be readily addressed through mitigation measures and management programmes.

The Bank's specialists and consultant undertook a site visit to clarify the issues and mitigation measures. The client is developing the following documentation in Turkish and English: Non- Technical Summary (NTS), Environmental and Social Assessment (ESA), Environmental and Social Management Plan (ESMP), Stakeholder Engagement Plan (SEP) and Environmental and Social Action Plan (ESAP). The project was exempted from the national Environmental Impact Assessment (EIA) requirement by the Turkish Ministry of Environment and Urbanisation.

Kocaeli Integrated Health Campus is located in Gindogdu village in Izmit District of Kocaeli Province. Access to the site is via the Trans-European Motorway that passes north of the site. The area of approximately 35.3 ha is state-owned land that has already been allocated to the Ministry of Health to develop the hospital campus. No private land acquisition is required. The project site is surrounded by residential areas Tavsantepe, Bekirdere, Gundogdu and Yesilova. Easy access is possible by public transportation.

The due diligence did not identify any significant issues. No biodiversity impacts were predicted and the geological survey indicated that there is relatively low risk of an earthquake. The project's buildings are designed according to Turkish legal requirements and international hospital design standards.

Mitigation measures for noise, dust and vibration during the construction and operation phases have been developed in the ESMP. Traffic management was assessed during the construction and operation and the Project site can be accessed via public municipal bus services. Management system has been developed for both the construction and operation phases. Medical waste will be sent to the regional medical waste sterilization unit. Small amounts of low level radioactive waste from testing/instruments during the operational phase, as well as infectious disease control will be strictly handled in line with regulations and best international practices.

No significant adverse social issues were identified and the project is expected to provide important social infrastructure and improved health services to the population. Approximately 2400 workers are expected to be employed during the peak construction period. Onsite worker accommodations and an occupational health and safety management system will be developed in line with Turkish legislation and international standards. When the hospital campus is operational, approximately 5000 workers will be employed. Grievance mechanisms will be provided for workers, including
subcontractors.

An ESAP is being developed and agreed with the client to address any necessary commitments to structure the project to meet EBRD requirements. Management plans will be prepared for construction camp, traffic, emergency response, and security before the construction phase starts.

The international requirements for life, fire safety and emergency response will be implemented. An SEP (including public grievance mechanism) was developed in May 2016 and will be updated and implemented as the project progresses. Public meetings were held in May 2015. Following completion of the ESA package, an ESA, NTS and SEP will be disclosed on the client's and the EBRD's websites. The EBRD will monitor the project's E&S performance by reviewing lender supervisor reports, annual E&S reports, and periodical monitoring visits.

Environmental Assessment Report

Client's website with English and Turkish versions of ESA package

Technical Cooperation

None.

Company Contact Information

Yalcin Eliguzeloglu
yalcin.eliguzeloglu@gama.com.tr
+90 312 248 4883
http://www.kohas.com.tr/tr

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

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.