Velindre Cancer Centre: follow-up of Welsh PPP model

Mutual Investment Model (MIM): full update as promised!

Anyone interested in Capital Investment in Health (CIH) and innovative models of Public-Private Partnerships (PPPs) will be familiar with the emergence in Wales, UK of the Mutual Investment Model (MIM) type of PPP.

Triggered by the scarcity of public funding, this MIM aims at procuring infrastructure and a related stream of services backed by private pre financing, against the operation of the asset before ownership is transferred back to the contracting authority.

As pointed out by your Decide Hub as early as August 2020, the MIM model is a repackaging of the concession model, or perhaps even a rebranding of the BOOT model which stands for Build Own Operate Transfer as seen in the UK and continental Europe for over 20 years:

A textbook PPP which we amply documented here as mentioned above, as well as followed up in April 2021 when the Welsh plan for its cancer centre came to fruition (click here).

With a 15% public equity funding to back up the PPP scheme, the project to build and operate this ambitious cancer centre (a 32,000 sq.mt project for a total amount of £562 million against a fee paid to the private contracting consortium fronting the financing of the project) found a shortlist of candidates amongst which two companies.

Those were later awarded the contract and formed a Special Purpose Vehicle or project company, as you may know from reading our newsletter (click here for information published earlier in 2022).

Now the Welsh contracting authority is launching another tender to test the project (click here to access the tender documents). The Velindre University NHS Trust aims at procuring advisory services of an

Independent Tester with the skills and experience to deliver services relative to the nature, scale and complexity of the Project and including project specific aspects of the design and construction.

It is another step in the design and implementation of one of the largest PPP schemes in Western Europe and you can rest assured that we will keep you updated of the phases to come.

As a codicil to the follow-up of this project, we can only suggest to keep in mind the timeline of this project. For those decision makers in LMICs interested -or pushed by IFIs in some cases- in PPPs for their health system transformation projects.

It is worth noting that the project was initiated in 2019, came to fruition in 2021 to be awarded to a project company in 2022. Testing of the final proposal will be held in 2023.

36 to 48 months to ensure that the project is viable, sustainable and offers good prospect to deliver quality and value for money. So much for the rationale of so many projects relying on "urgency" or "fast tracking health services upgrade".

This is the price to pay to engage soundly -and not without risks- in complex contracting arrangements, which rationale should rarely be to save time and catch up with health service modernization.