The Malta Independent
'Mater Dei` ora pro nobis! Mother of God` Pray for us.
'Mater Dei` ora pro nobis! Mother of God` Pray for us.
We need every bit of prayer to survive the new hospital saga. We had mortally dangerous political spin at its best this week, when the government announced the agreement reached with Skanska for completion of the project.
Not that it does not have some positive factors! At least we now have a fixed completion date and capped construction expenditure, with Skanksa being responsible for delivering the hospital by that date and at that price. Lm145 million for delivery on 1 July 2007. At least that`s what we were told!
Then somewhat less eloquently we
were also informed that this price does not include the medical equipment,
furniture, IT and other movables, for which there will have to be provided a
separate budget of some Lm40 million. In addition, one has to pile on the cost
of finance for a project that has been dragging on for more than 10 years in the
development stage, and the cost of re-location from St Luke’s to Mater Dei.
Without including any notional cost for the valuable land that has been dedicated to the project, the Lm200 million mark for the completed project seems well within reach. And that is by no means the end of the story, as any failure in reciprocal obligations could involve further revisions.
Government’s political spinners have been very emphatic in claiming that the new agreement has saved about Lm25 million of costs that would have been incurred if the project were to have been completed without renegotiating the deal with Skanska. This assertion is difficult to prove or disprove and therefore one could easily cheer as much as demure over it. It provides rich fertile ground for political spinners who, rather than help us to analyse the deal objectively on the basis of what in fact we are effectively paying, deflect public attention to hypothetical savings, real or imaginary.
I would rather analyse on the certitudes of what we are actually due to pay rather than on what we are supposedly saving. So in the end we are going to have a modern hospital with 800 beds that at completion stage is coming with a price tag of Lm200 million and counting. Making a rough calculation, that comes at an overall absorption cost of Lm250,000 per hospital bed or Lm200,000 per bed if the specialised hospital equipment is excluded.
Now let’s be generous and take the lower figure of Lm200,000 per bed. And let’s be even more generous and assume that each hospital bed will be in a separate room so it is equivalent to 800 rooms. This is not really the case, as many beds will be in duplex rooms or small wards.
Don’t you think that Lm200,000 per bed/room in a new hospital, excluding the cost of medical equipment and the cost of the land, is quite over the top? I certainly think so and I base myself on a simple calculation.
Excluding the specialised medical equipment, building a hospital should be cheaper than building a five-star de-luxe hotel. Firstly, because hotels don’t come in a configuration of 800 rooms but rather anything between 250 and 450 rooms. There are, consequently, fewer rooms over which to spread the common costs.
Secondly, because a five-star de-luxe hotel has to be finished to a superior standard of luxury than a hospital, especially if it has to carry an international brand name like Hilton, Westin or Intercontinental. Thirdly, because a hotel has to have huge catering and auxiliary facilities to provide banquet and food and beverage business to non-residents, which is not applicable to a hospital.
So you would expect that a five-star de-luxe internationally branded hotel room normally having two beds would cost somewhat more on a total absorption basis, excluding the cost of the land, than the cost of Lm200,000 per bed/room which will be the final bill at our new hospital, excluding the cost of the medical equipment.
Having some experience in the matter, I can categorically confirm that even using the highest specifications and amortising on much smaller number of rooms, all the central public areas, food and beverage, resort and sports facilities which normally go with such a hotel, the total absorption cost per room should never exceed Lm60,000. And this is on the high side and has a good margin for error.
This is by no means something particular toMalta London
Spinning aside, therefore, can anyone please explain why we should be invited to celebrate for having to pay more than three times the cost of development of a top-class hotel room for a bed in our new hospital when, in fact, we should be paying somewhat less than the cost of such a hotel room?
And can anyone please explain how finishing, and presumably paying for, this project by 2007 squares up with the fiscal objective to balance the budget by that date? And how we are going to finance the much higher operating cost of the new hospital without prejudicing the entitlement to free health services in state hospitals?
Rather than joining government spinners in celebrating hypothetical savings, the independent press should be clamouring for a true value-for-money audit for the entire new hospital project from alpha to omega. It’s a pity the independent press shrugs its duty and like the litany in the holy rosary, submissively professes “ora pro nobis” to the government’s spinners shameful exhortations.
Without including any notional cost for the valuable land that has been dedicated to the project, the Lm200 million mark for the completed project seems well within reach. And that is by no means the end of the story, as any failure in reciprocal obligations could involve further revisions.
Government’s political spinners have been very emphatic in claiming that the new agreement has saved about Lm25 million of costs that would have been incurred if the project were to have been completed without renegotiating the deal with Skanska. This assertion is difficult to prove or disprove and therefore one could easily cheer as much as demure over it. It provides rich fertile ground for political spinners who, rather than help us to analyse the deal objectively on the basis of what in fact we are effectively paying, deflect public attention to hypothetical savings, real or imaginary.
I would rather analyse on the certitudes of what we are actually due to pay rather than on what we are supposedly saving. So in the end we are going to have a modern hospital with 800 beds that at completion stage is coming with a price tag of Lm200 million and counting. Making a rough calculation, that comes at an overall absorption cost of Lm250,000 per hospital bed or Lm200,000 per bed if the specialised hospital equipment is excluded.
Now let’s be generous and take the lower figure of Lm200,000 per bed. And let’s be even more generous and assume that each hospital bed will be in a separate room so it is equivalent to 800 rooms. This is not really the case, as many beds will be in duplex rooms or small wards.
Don’t you think that Lm200,000 per bed/room in a new hospital, excluding the cost of medical equipment and the cost of the land, is quite over the top? I certainly think so and I base myself on a simple calculation.
Excluding the specialised medical equipment, building a hospital should be cheaper than building a five-star de-luxe hotel. Firstly, because hotels don’t come in a configuration of 800 rooms but rather anything between 250 and 450 rooms. There are, consequently, fewer rooms over which to spread the common costs.
Secondly, because a five-star de-luxe hotel has to be finished to a superior standard of luxury than a hospital, especially if it has to carry an international brand name like Hilton, Westin or Intercontinental. Thirdly, because a hotel has to have huge catering and auxiliary facilities to provide banquet and food and beverage business to non-residents, which is not applicable to a hospital.
So you would expect that a five-star de-luxe internationally branded hotel room normally having two beds would cost somewhat more on a total absorption basis, excluding the cost of the land, than the cost of Lm200,000 per bed/room which will be the final bill at our new hospital, excluding the cost of the medical equipment.
Having some experience in the matter, I can categorically confirm that even using the highest specifications and amortising on much smaller number of rooms, all the central public areas, food and beverage, resort and sports facilities which normally go with such a hotel, the total absorption cost per room should never exceed Lm60,000. And this is on the high side and has a good margin for error.
This is by no means something particular to
Spinning aside, therefore, can anyone please explain why we should be invited to celebrate for having to pay more than three times the cost of development of a top-class hotel room for a bed in our new hospital when, in fact, we should be paying somewhat less than the cost of such a hotel room?
And can anyone please explain how finishing, and presumably paying for, this project by 2007 squares up with the fiscal objective to balance the budget by that date? And how we are going to finance the much higher operating cost of the new hospital without prejudicing the entitlement to free health services in state hospitals?
Rather than joining government spinners in celebrating hypothetical savings, the independent press should be clamouring for a true value-for-money audit for the entire new hospital project from alpha to omega. It’s a pity the independent press shrugs its duty and like the litany in the holy rosary, submissively professes “ora pro nobis” to the government’s spinners shameful exhortations.
No comments:
Post a Comment