Yesterday, 20 December 2018, the latest NHS Greater Glasgow and Clyde healthcare PPP reached financial close. The DBFM healthcare project will procure two new facilities (the new Greenock Health Centre and Mental Health In-patient facilities at the Stobhill Hospital) from hub West Scotland under a single hub/DBFM contract. Under current plans, a third facility will be added to the contract under a pre-agreed change procedure during 2019.
We supported the NHS in-house team and were responsible for a range a financial transaction support activities including assessing financial submissions from the private sector partner, confirming that returns, margins and fees are consistent with benchmarks and confirming that the financial model is consistent with technical project details. On the day of financial close we supported rate benchmarking, financial model optimisation and completion activities.
The Glasgow City Council procurement of the new Blairdardie and Carntyne primary schools reached financial close on 23 October 2017, and the first of the schools, Carntyne, was handed over on time and budget on 19th October 2018, with Blairdardie on target for hand over on time in February 2019.
The new primary schools have been developed under a single compact PPP contract between the Council and hub West Scotland.
As the public sector Financial Transaction Adviser on this PPP we supported the Council’s in-house team and were responsible for assessing financial submissions from the private sector partner. This included confirming that returns, margins and fees are in line with the market and consistent with pre-agreed levels. We worked closed with technical specialists to calibrate the payment mechanism, and supported commercial negotiations.
We are helping NHS Highland procure two new DBFM/PPP hospitals from hub North Scotland. The new hospital in Broadford on the Isle of Skye will replace the ageing Dr MacKinnon Memorial Hospital, and the new hospital in Badenoch and Strathspey will centralise services currently delivered through several dispersed inpatient units that are not fit for purpose.
Within a wider redesign of health and social care services, the new hospitals will deliver a range of benefits including:
- greater numbers of people being cared for at home;
- reduced length of stay in hospital;
- co-location of specialisms and related services;
- equality of access to services;
- dementia-friendly inpatient facilities;
- more dignity and privacy for patients – 100% single rooms with en suite.
The two new hospitals will be developed under a single DBFM/PPP contract using the Scottish hub ‘compact PPP’ modality.
We will support the NHS in-house team and are responsible to assessing financial submissions from the private sector partner, confirming that returns, margins and fees are value for money and consistent with pre-agreed levels. We will liaise with technical specialists to calibrate the payment mechanism and Key Performance Indicators (KPIs), and will contribute to commercial negotiations.
We have been appointed by the International Finance Corporation (IFC) to support them and the Municipality of Prishtina with the preparation and implementation of the first Education PPP project in Kosovo. The project will see two schools rehabilitated and four new ones built. Our role will be to help address various technical and commercial issues as part of IFC’s due diligence and transaction structuring.
This will be the first Education PPP in Kosovo, and continues our leading role in structuring Education PPPs worldwide. It adds IFC (part of the World Bank Group) to the list of Multilateral Development Bank partners with whom we have worked on Education PPP assignments, a list that also includes the Asian Development Bank, Inter-American Development Bank, Development Bank of Latin America and the European Investment Bank.
The ‘One Year Review’ of e-sgoil, written by our Education Specialist Bruce Robertson and Director Martin Finnigan, has been published by Comhairle nan Eilean Siar, (Western Isles Council). Our review documents the remarkable success of this initiative which takes Smart Cities concepts and applies them in a rural Smart Islands context.
Careful data gathering and analysis, reliable communications infrastructure and technology-literate teaching staff have opened up new curriculum and pedagogical opportunities throughout the islands.
The potential of this approach to extend from schools into vocational and higher education has been demonstrated, and the impact on Cosnadh (employment), Cánan (language), Cultar (culture) and Coimhearsnachd (community) is clear.
The report assesses progress against the funding objectives, describes the transformational business model, and identifies the current and potential economic impacts.
The e-sgoil model is inexpensive, efficient and scalable. It is applicable in remote, rural and dispersed communities regardless of location. The report is can be downloaded here.
The Asian Development Bank has published our article on Scottish Education PPP models and how they could be applied in the bank’s sphere of operations. In this blog we:
- look at reasons why PPP is less widely adopted as a development model for education infrastructure compared to other sectors such as energy, transport and utilities;
- consider the benefits that wider adoption of PPP could bring;
- describe innovative structured that have been developed in Scotland; and,
- suggest how they might be structured and deployed in the region.
The full article can be accessed on Asian Development Bank Blog.
Our appointment as Transaction Financial Advisers by Aberdeenshire Council on the procurement of a replacement for Inverurie Academy and Community Campus came to a successful conclusion when financial close was achieved on 19 April 2018.
This is our second such appointment by the Council, having previously supported the procurement of Alford Community Campus which opened its doors to pupils for the first time in October 2015.
Photograph credit hub North Scotland
Both new schools were procured with our support from hub North Scotland under the hub/DBFM/PPP structure. They will variously serve pupils in early years (#kindergarten), primary and secondary education and include a range of community facilities such as theatre, sports hall, swimming pool, community library and dance studio, with all-weather and grass playing fields.
We are very pleased to have supported Angus Council on the procurement of replacements for Muirfield and Ladyloan Primary Schools in the coastal town of Arbroath, which reached financial close on 24 November 2017. The new schools are being developed under a single Design-Build-Finance-Maintain contract with hub East Central.
Each school will have a capacity of approximately 335 primary pupils and 72 pre-school pupils.
We supported the Council’s in-house team in confirming that financial submissions from the private sector partner are within the various limits set by the Territory Partnering Agreement and we worked closely with the financing partners to achieve a successful financial close to the project.
This continues our long relationship with Angus Council which including supporting the initial feasibility study, and subsequently acting as transaction advisor, for the Forfar and Carnoustie schools PPP.
We have been reappointed to provide financial advisory support to Dumfries and Galloway Council for the operational phase of the Smarter Schools PPP project.
Stranraer Academy, refurbished and extended
This project was signed in 2008 and all eleven schools were operational by 2010. The project was financed by a £127 million facility provided by HSBC and the European Investment Bank.
This reappointment continues our long relationship with the Council which spanned the project business case, tender preparation and evaluation, financial close, and project effectiveness assignments during the operational phase.
Caledonian Economics would like to congratulate NHS Orkney, Robertson Capital Projects and the project team on reaching financial close and signing the contracts for the New Orkney Hospital and Healthcare Facility.
With colleagues from QMPF we have been working with NHS Orkney for several years to support the business case and subsequent procurement under a variant of the Scottish PPP/NPD model.
The new Rural General Hospital will have 49 inpatient beds covering acute, cancer & palliative care, maternity and rehabilitation and will host a variety of services including two GP Practices, Dental and support services. When it opens in 2019 it will provide a state of the art modern building which will enhance the services staff can offer, utilising technology and the improved facilities.
More details here: http://www.ohb.scot.nhs.uk/new-hospital-and-healthcare-facilities
This continues Caledonian Economics’ long association with Orkney, having previously supported Orkney Islands Council on the procurement of the new Kirkwall Grammar School and Theatre, Pickaquoy Leisure Pool and Stromness Primary School, using a unique variant of the PPP structure.