Lautoka Hospital

The Public Private Partnership involving the Government, Fiji National Provident Fund and Aspen Medical of Australia in terms of the Ba and Lautoka Hospital has created severe financial issues for the Government.

Finance Minister Professor Biman Prasad says in 2019 the previous Government entered into the PPP to develop the two public hospitals in Lautoka and Ba however the Ministry of Health was not involved.

The concept for the PPP was to create a concession agreement for a private company to come in, completely rebuild the Lautoka Hospital and then operate it for 30 years, together with Ba Hospital.

“The concept itself is fine. Involving the private sector in health care, particularly if it can deliver new facilities that the Government cannot afford, is an appropriate option as long as it is carefully managed. Unfortunately, this project was not managed well. The previous Government did no “demand study” for the project. In other words, before it signed an agreement to pay for a range of medical services to be provided to the public, it had no idea how many people would use the services, for what purpose, and the resulting cost.”

He adds the Concession Agreement was basically a blank cheque for the concessionaire.

Prasad says the previous Government wanted local involvement in the deal and decided Fiji National Provident Fund should be Aspen’s partner.

“FNPF had not bid to be part of the project. It was effectively ordered to take an 80% stake in a new company called Health Care Fiji Pte Limited, or HCF. FNPF took 80% of its shares with 20% for Aspen. FNPF was given no option. It was given no chance to evaluate this investment for itself or to work out its economic return. It was just told to sign up. This was the extent of the serious and unlawful political interference in the affairs of FNPF that was taking place at the time.”

Professor Prasad says the COVID crisis over 2020 and 2021 delayed the project However, suddenly, in 2022, the previous Government changed its mind even though the new hospital had not yet been designed or re-built, HCF was ordered to begin providing medical services. There was no agreement for this.

He adds that it was all about politics and looking good for the cameras and winning votes for the coming elections.

Prasad says services in the Ba and Lautoka Hospitals are costing about $10 million per month or about $120 million per year.

So these two hospitals, alone, are consuming more than one-fifth of the entire national health budget.

He adds that it is important to remember that the Ministry of Health budget is not just about hospitals as it also has to cover administration, preventive health services, disease control and disaster preparation, health screening and many other things.

Prasad says the current arrangements with HCF drain the Health budget. That means that other hospitals and health centres are not properly funded and their service standards go down, which is not fair on the people in those areas.

He adds that over the last 18 months HCF and the Coalition Government have been in dialogue over a number of aspects of the Concession Agreement.

There are legally binding agreements now with serious financial consequences for all the parties if they are breached.

Prasad says FNPF has concluded that, regardless of the way it came into this project, it will have to stay in and work out the best way to get a commercial return on it.