The first Private Finance Initiative (PFI) contract in Canada: investments of 210 million and a 30-year concession
The project entails designing, financing and constructing a new 608-bed building, as well as providing non-clinical services such as maintenance and cleaning at the William Osler Health Centre for 30-year concession
With a total of 708 beds and serving a population of 750,000, the William Osler Health Centre is the largest hospital complex in the province of Ontario.
Ferrovial subsidiary Ferroser already manages services in 51 hospitals in Spain (a total of 20,560 beds).
Through its services subsidiary, Ferroser, Ferrovial is the only Spanish group to be short-listed for the contract to build an extension to the William Osler Health Centre in Brampton, Ontario, and manage non-clinical services. This contract, the first Private Finance Initiative (PFI) in Canada, necessitating investments of 210 million (320 million Canadian dollars), relates to designing, financing and building a new 608-bed wing, as well as a 30-year operating and maintenance concession.
Serving a population of 750,000, the 708-bed William Osler Health Centre employs 3,800 medical and health personnel and is the largest hospital complex in the province of Ontario.
Maintenance and integral management of a hospital
This latest tender will virtually double the hospital´s facilities (by adding 608 beds) and provide private management of non-clinical services, maintenance and facility management, cleaning, security, reception, food-service, maintenance and replacement of specialized medical teams (electromedicine), waste management, telephony, power, warehouse, cafeteria, student residence and accommodation for family members, etc. The contract also involves the construction and management of a car park with 2,000 parking spaces, and the construction and maintenance of a cogeneration plant for the hospital.
The consortium, headed by Ferroser, Ferrovial´s services arm (which specializes in facility management), includes H.H. Angus (a local consultancy and services management company), Ferrovial Agromán (Ferrovial´s construction subsidiary, which will be responsible for enlarging the premises) as well as Buttcon and Ledcor (local companies specialized in building).
Canada´s First PFI (Private Finance Initiative)
Ferrovial will compete against three other pre-qualified groups in this process: Access Health Ottawa (PCL Constructors Canada, ABN Amro Bank and others), Healthcare Infrastructure Company of Canada (Carillion Canada, Borealis Infrastructure Management and others) and Ottawa Healthcare Group (SNC Lavalin, Bank of Montreal and others). The four consortiums will bid in February 2003 and the outcome will foreseeably be announced in May 2003. The William Osler Health Centre expects the new hospital to be operational in 2005.
The contract for the construction and management of non-clinical services at the William Osler Health Centre is the first PFI (Private Finance Initiative) in Canada. Under the PFI model, the concessionaire recovers the capital expenditure through fixed payments by the Administration, provided that the quality standards set in the contract are met. Two other tenders are currently under way for the privatization of services at Canadian hospitals: the Royal Ottawa Hospital and the Fraser Valley Health Centre (Vancouver).
Ferroser manages services in over 50 hospitals
Ferrovial´s services area comprises urban services and facility management (both via Ferroser) and infrastructure upkeep (via Grupisa).
Ferroser is one of the largest companies in the growing Facility Management market, which consists of integrating and optimizing all the services of a building and providing the supplies and installations required by the users: maintenance, cleaning, energy, security, internal mail, gardening, etc. Ferroser applies this management model in 2,300 buildings (over 3.5 million square meters), including hospitals, museums, universities, prisons, shopping malls, fabrics, landmark buildings and offices.
In the hospital sector, a market which Ferroser leads in Spain, it is currently providing maintenance and cleaning in 51 Spanish hospitals (20,560 beds) including Fundación Hospital Manacor (Mallorca), Hospital Juan Ramón Jiménez (Huelva), Hospital Ramón y Cajal (Madrid), Hospital Carlos Haya (Málaga), Hospital Virgen de la Arrixaca (Murcia).
Ferrovial´s services division increased its revenues by 10.7% to 215 million in 2001 and its order book was 850 million at 2001 year-end. Billings rose by 57.5% to 156.6 million in the first half of 2002.
Ferrovial in Canada
Through its subsidiary Cintra, Ferrovial has managed the 108 km 407ETR toll road in Toronto since the middle of 1999, after it was awarded the concession to build, maintain and operate it for 99 years. The contract for 407ETR represents an investment of over 2.4 billion; it is the largest privatization in Canada´s history, and the largest investment in toll roads outside Spain led by a Spanish group. The concession was financed with the largest-ever long-term bond transaction in the Canadian market.