Big players in line for Midland build

TWO of Western Australia’s largest construction companies have been signed up by competing bidders for the $360 million Midland Health Campus project, which is shaping up as an intriguing test of the state government’s support for public private partnerships.

Not-for-profit group St John of God Healthcare has enlisted Brookfield Multiplex as its construction partner and Hassell as the architect for its consortium.

Listed company Ramsay Healthcare has signed up construction company John Holland along with architects Peter Hunt and Silver Thomas Hanley for its competing proposal.

The state government last month named Ramsay and St John of God as the short-listed bidders but details of their consortiums have not been publicly disclosed.

The Midland Health Campus is the nearest WA has gone to a fully-fledged public private partnership in the hospital sector.

While the state and federal governments will fund the project, the private sector will be responsible for the design, construction, operation and maintenance of the new hospital.

Critically, the private operator will be responsible for both clinical and non-clinical services.

Ramsay and St John of God both have an operational track record to support their proposals. In WA, Ramsay runs the Hollywood and Joondalup hospitals among others while St John of God runs major hospitals at Subiaco and Murdoch.

For the construction companies and architects, hospital projects represent a big opportunity, as the pipeline of new private sector projects gets weaker.

This focus has already paid off for John Holland, which recently won the contract to build the $170 million Albany Health Campus, to be the largest country hospital project ever undertaken in WA.

This will add to John Holland’s portfolio of hospital projects. It is currently managing the $330 million expansion of the Joondalup Health Campus, and previously managed the expansion of Ramsay’s Hollywood Private Hospital.

Brookfield Multiplex also has hospital experience, most notably as building contractor for the $2 billion Fiona Stanley Hospital, currently under construction.

Brookfield Multiplex’s regional managing director construction & development Chris Palandri said private sector work had dropped off significantly.

“The government bringing on some of the hospital work is very timely,” he said.

Mr Palandri said he was comfortable that the construction sector would be able to handle the volume of government work coming its way.

Future opportunities include the planned $1.1 billion children’s hospital at QEII Medical Centre, a privately owned and run multi-storey car park at the same location, as well as several country hospital projects.

The state government will be hoping its plans for a PPP at Midland proves more successful than its last attempt.

In 2009, it announced that St John of God Healthcare and The St Ives Group had been selected to develop and run a new Busselton Health Campus.

However those negotiations came to nothing, with Health Minister Kim Hames announcing in December that: “considerable discussions with the private sector had not resulted in any private funding for the development”.

A spokesman for the Department of Treasury & Finance said the Midland proposal was more akin to the location and scale of the Joondalup Health Campus, where public hospital services had been delivered by Ramsay for years.

“The ‘design-build-operate-maintain’ procurement model adopted for Midland Health Campus has been selected following extensive industry consultation and has drawn heavily from the successful Joondalup Health Campus and Peel Health campus models,” the spokesman said.

“It differs significantly from the proposed Busselton model, where private providers were asked to finance infrastructure requirements for specific services.”

At Midland, the private provider will deliver all services.