THE state government is evaluating a range of alternative contracting and procurement models in the health and corrective services fields, potentially offering new opportunities to building construction companies.
THE state government is evaluating a range of alternative contracting and procurement models in the health and corrective services fields, potentially offering new opportunities to building construction companies.
However, the government has not gone as far as its counterparts in other states, which – partly because they are under greater financial pressure – have handed the development and operation of hospitals, schools and other social infrastructure to the private sector.
One of the most significant steps toward increased private sector involvement in what has traditionally been the province of the public sector is the planned $360 million Midland Health Campus development.
This project will be designed, built, operated and maintained by the private sector, which will be responsible for both clinical and non-clinical services.
Not-for-profit group St John of God Healthcare and listed company Ramsay Health Care were named last month as the short-listed bidders for the project, which is opposed by Labor and the unions.
Treasurer Christian Porter said both companies would be assessed to determine which could provide the best care.
“They will also be assessed as to whether they represent value for money when compared to the cost of public sector delivery,” Mr Porter said.
The contracting model at Midland takes private sector involvement a step further than other major hospital projects planned for Western Australia.
Brookfield Multiplex is building the $2 billion Fiona Stanley Hospital, which will have non-clinical services provided by international services company Serco; clinical services, however, will be provided by the health department.
Similarly, the government has called for expressions of interest from the private sector to design and construct the new $1.17 billion children’s hospital at QEII Medical Centre.
The expressions of interest process will result in the appointment of a managing contractor to design and build the hospital, with construction to start early next year.
The government had originally planned to seek private sector funding for the new hospital but changed its mind after gaining a revenue windfall from an iron ore royalties deal, which enabled the government to fund the project itself.
In contrast, a fully-fledged public private partnership (PPP) is planned for two new multi-storey car parks to be built at the QEII site.
The government is scheduled to appoint a contractor early this year to finance and build the car parks, at an estimated cost of $140 million.
The new car parks will have 3,525 bays, taking the total number of bays on the site to 4,560.
The successful contractor will also be given a long-term contract to operate all of the parking on the QEII Medical Centre site.
At the end of the contract, ownership of the car parks will revert to the QEII Medical Centre Trust.
Other projects planned for the QEII site include a new headquarters for the WA Institute for Medical Research, which is currently spread across two sites; this contract is likely to be awarded this month.
In addition, Brookfield Multiplex was recently awarded a contract to build a new central energy plant, expected to cost about $180 million.
The new contracting models for the major metropolitan hospitals contrast with the more traditional approach for country hospitals.
The government recently appointed John Holland for construction of the $170 million Albany Health Campus, while Pindan was appointed to the $55 million Kalgoorlie Health Campus project.
Corrective Services is another area in which the government is assessing new procurement models.
The $232 million Eastern Goldfields Regional Prison is to be designed and constructed by the private sector, but a decision on the method of custodial service has not been made.
In contrast, the $126 million Acacia Prison Expansion is to be designed and constructed via existing public sector procurement processes, with private sector service delivery.
The Eastern Goldfields Regional Prison and Acacia Prison Expansion projects are both at project definition stage, and will progress to tender this year, a spokesman for the Department of Treasury & Finance told WA Business News.
Construction for both projects is planned to commence in early 2012.
The state government believes the existing Acacia Prison, run by Serco under contract, is more efficient than state-run prisons.
It has estimated Acacia costs 20-30 per cent less to operate than prisons in the public system, while also meeting defined care and well being standards.
While planning for the new projects continues, the government recently awarded a contract for the much smaller expansion of its Banksia Hill detention centre.
The stage 2, $15.6 million expansion was awarded to Badge Constructions.
