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Lesotho Hospital And Filter Clinics: A Public-Private Partnership Case Solution & Answer

Lesotho Hospital And Filter Clinics: A Public-Private Partnership Case Solution  

Introduction

This case revolves around the partnership between the health ministry for the government of Lesotho, which is a small country in South Africa and a private association led by Net-care, which is a hospital. The partnership between both of them is referred to as a public-private partnership (PPP).The purpose of PPP was to initiate the operations of a new hospital as well as providing the services by constructing four feeders in the capital called Maseru.According to the International Finance Corporation (IFC), the project was a success. The project comprises building new hospitals and providing clinical services to the patients.In this case, there are three issues which are: actions were taken by the government of Lesotho, International Finance Corporation (IFC), and private parties for making public-private partnership (PPP) successful, identifying the performance factors for designing and implementing and the last issue is related to the reliability of the project in terms of cost and quality of health services.(Lee, 2013)

The IFC performed an analysis of the project in terms of due diligence that comprised of three aspects: legal, financial and technical. The financial model that was being utilized was built by IFC on its own which mainly contained each of the proposed requirements of RFP. For this reason, a bid was developed to meet the provisions that were being outlined in RFP. Because DBSA reported the bad deterioration of the global financial market. Based on due diligence, IFC recommended the government feasible options in terms of tendering, structuring, and implementation. This process included the study to identify the criteria for documenting the levels of service and conditions of facilities.

Under PPP, there was a remarkable improvement in quality and a decrease in the number of deaths.Now the health care facilities were treating more patients as compared to the other health networks. There was an increase of 30% of patients every day and there was an increase in deliveries by 45%. For the PPP project, an increased number of employees were hired for the construction and operation of referral hospitals. However, the hospital that was going to be replaced, was facilitating 800 employees, which was a significant problem for the general public.

The potential risks mainly associated with was the provision of clinical services in Africa. Despite the increased involvement of private sector, no organization was willing to take the financial risks in terms of providing both clinical health services and construction responsibility. Such risks were inherent in the PPP agreement. Other than such risks, one of the remaining hurdles was primarily an affordability risk.

Q-1: How important was IFC‘s role in the project? What critical risk exposures we-readdressed by the institution?

The International Finance Corporation (IFC) played a significant role in the project, and according to the International Finance Corporation (IFC) this project was a success. The IFC performed an analysis of the project in terms of due diligence that comprised of three aspects, which were: legal, financial, and technical. Based on due diligence, IFC recommended the government with a feasible options in terms of tendering, structuring, and implementation. This process includes the study to identify the criteria for documenting the levels of service and conditions of facilities.

Besides that, it also provides guidelines for evaluating the future and comparing the operational data that is realistic for bidders, so that it could be used for making proposals. IFC also worked along with the government so that the government could understand the process thoroughly and would maintain its capacity, which is necessary for the implementation. In 2005, IFC became the transaction advisor to assist the government in structuring the PPP, which included:establishing a hospital and re-establishing three old clinics that used to provide primary care facilities………………….

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