Bahrain’s recent project focus has been a mix of re-triggering stalled projects and looking ahead in the pipeline to required infrastructure throughout the Kingdom. As part of social infrastructure requirements an announcement made back in 2014 confirmed that there would be a significant spend in the healthcare sector over the next 10 years.
Arising predominantly from population growth as well as an increase in chronic diseases, this announcement generated a renewed impetus in healthcare projects generally across primary, intermediary and secondary care; with different drivers from both the public and private sectors. Now in 2016, those drivers continue to push forward.
On the public sector side the trend is towards smaller specialised health centres, clinics and facilities including diabetes care, autism and child services, and sickle cell anaemia. Hamad Kanoo Health Centre in Riffa being an example of such a project.
On the private sector side, whilst catering for the wider Bahrain market, we also see trends towards healthcare tourism in the region; in particular between Bahrain and Saudi Arabia. Projects such as Dilmunia and King Abdullah Medical City are two current examples in the private sector.
So it is not the case that the days of building out a large scale 250 bed hospital for general medical services is gone. It is more a case of Bahrain focusing specifically on what healthcare services it actually needs to deliver as between the private sector and the public sector.
With such a diverse range of projects in pipeline, from small health centres to large scale health villages, procurement and contracting decisions as to design, construction, operation and facilities maintenance become all the more important. This is equally true where the client is the Ministry of Health / Bahrain government or a private developer or investor.
What then can be done to ensure successful operational and functional project delivery?
- Early procurement is key for particularly where facilities are highly specialised and require long lead times for specialist equipment and new technology; front end contractor co-ordination and involvement in the design process to ensure that the construction process meets all required design requirements with little risk of variation as the project progresses;
- Facilities design must meet Ministry of Health standards whether prepared by local or international healthcare designers;
- Construction, operation and maintenance requirements can be properly aligned and coordinated through using a series of properly drafted construction contracts based on either:
- the FIDIC Conditions of Contract for Construction (1999 Edition); or
- the Bahrain Ministry of Works Standard Conditions (2009 Edition).
In terms of financing, private investors continue to back healthcare projects based on sensible local and international investment projections. For the public sector and in the current economic climate, there is a continuing interest in the Public Private Partnership (PPP) model used, for example, on a recent Ministry of Housing project in the Kingdom.
PPP is a part government funded project with the support of private business. It is operated by means of partnership between government entities and private companies. The private company provides the public service for a fixed period of time by way of a Concession Agreement. It takes on the majority of the risk ( but also has the potential to make significant profits), while the government entity makes a contribution, for example in the form of land, buildings, infrastructure or off-take arrangements and often acts as the “Asset Owner”.
There are arguments for and against the use of PPP. However, the expertise, efficiencies and technology that private companies can bring, particularly in the arena of healthcare services, is a significant factor in support PPPs.
With widespread use in the United Kingdom, USA and Canada for many years, PPPs have a good reputation and track record for healthcare projects. We also see PPP models increasingly deployed in countries such as India and China. It seems that Bahrain may follow suit in due course to achieve the specialised services and facilities that it needs. For now Bahrain is sensibly focusing on what it needs to actually deliver rather than designing and constructing facilities that may not be fit for purpose.