Algarve Hospital: fast tracking health PPP project

DBFOM model to deliver better services in Portugal

The Government of Portugal decided earlier in 2022 to use a complex contract to procure hospital infrastructure services to the population of the Algarve region.

Portugal, like most Latin countries in Europe whose legal systems are based on Roman law, are familiar with “traditional” Public-Private Partnerships, i.e. concessions to entrust the private sector with the operations of public infrastructure and recouping fees upon the users. This is the case for toll roads, harbours or other transportation assets for instance.

The renewal of the PPP agenda through complex contracts such as DBFOM (Design – Build – Finance – Operate – Maintain) stems from the tidal wave of Private Finance Initiative in the UK and in Australia in the 90’s.

It permeated Europe and Portugal, which adapted ad hoc legislation and undertook a programme of infrastructure modernization through these instruments. Illustrative of this policy is the 2022 major PPP signed by the Government for the Lisbon Oriental Hospital.  The latest exemplification of this trend is the Algarve Hospital project, a healthcare PPP fast tracked by the Ministry of Health.

Partnership Bulletin Editor Paul Jarvis announced in October 2022 that the project was made a priority by Health Minister Manuel Pizarro who confirmed to Parliament as well as the press that after assessing available options, the PPP solution was preferred:

I confirm that we maintain this intention not only in relation to Eastern Lisbon, but in the new project for the central hospital of the Algarve

Barely a month later, the Council of Ministers green lighted the PPP study for the project which will consists in the following services:

Under the plans, a private partner will design, build, finance and maintain the hospital, as well as supply and install the equipment. It will cover energy and utilities, as well as the management of car parks, with the contract to run for 30 years.

A mix of asset and ancillary-services which is now well under-plan with the team in charge of the monitoring of the project set up. Mr Pizarro underscored the need for the Algarve community and multiple stakeholders to be closely associated to the following of the project to ensure relevance and coherence:

This  (PPP project) commission will comprise the technical team, plus the Intermunicipal Community of the Algarve (AMAL) and other institutions, so as to give the relevant local organisations a stake in the decision-making process.

We believe it is very important that Algarve society, the Algarve community, local authorities and other institutions closely monitor the process of the new HCA.

Your Decide Hub already looked at health PPPs projects in Portugal, and did not shy from expressing concerns about the way the performance or value for money was assessed (click here to see our blog on Portugal health PPPs). We will make sure to follow the process and let you know of further steps and insight!