Sparks fly at Tšepong debate
There was heated debate at a stakeholders meeting held in Maseru last week to discuss the Public Private Partnership (PPP) that gave birth to the Queen ‘Mamohato Memorial Hospital.
The world-class health facility, which is located in Tšenola in Maseru, was opened in October 2011 to replace the dilapidated Queen Elizabeth II Hospital as the country’s major referral healthcare facility.
South Africa’s biggest private hospital group, Netcare, is the majority shareholder of the Tšepong consortium, which won the bid to build and run the hospital in 2009.
But an Oxfam report published last year questioned the investment and its financial sustainability.
The Oxfam report also claimed the hospital, simply known as Tšepong by locals, was consuming more than half of the country’s health budget and providing high returns (25 percent) to the shareholders at the expense of health programmes serving the rural poor.
The report also claimed the hospital was diverting resources needed for agriculture and education. Oxfam is an international confederation of 17 organisations working in approximately 94 countries worldwide to find solutions to poverty and what it considers injustice around the world.
Netcare has since publicly disputed these claims while the other shareholders — Excel Health Services (an investment company for Lesotho-based specialists and general practitioners) ; Afrinnai Health (Pty) Ltd (an investment company for Bloemfontein-based specialists and doctors); D10 Investments (Pty) Ltd (the investment arm of the Mohloli Chamber of Business); and Women Investment Company (Pty) Ltd (a Basotho firm) — have largely taken a backseat in the wrangling which followed the Oxfam report.
Last Thursday, the Lesotho Council of Non-governmental Organisations (LCN) facilitated debate regarding the issue, where former Finance Minister, Timothy Thahane, who played a key role in the signing PPP agreement, independent economic analyst Arthur Majara and Lehlohonolo Chefa from the Lesotho Consumer Protection Association (LCPA), were special guests.
The three were invited to explain the PPP model and if it was benefitting Basotho.
The LCN Health and Social Development Commission Coordinator, ‘Mamathule Mokhotla said her organisation was compelled to discuss the PPP agreement to “clear the confusion” following the Oxfam report.
The hospital was given M554 million of the M687.5 million allocated by government to the health sector for the 2014/15 financial year.
In his address, Dr Thahane said the allegations made in the Oxfam report were “far from the truth and uninformed”.
The government, he added, entered into the agreement because it was for the good of the people and there was need for a new referral hospital to replace the dysfunctional Queen Elizabeth II Hospital (Queen II).
The new hospital, he added, was meant to help improve the dreadful healthcare status in the country at the time.
Dr Thahane explained the reason why government opted for the PPP was it did not have the money to build a first-rate hospital that Basotho needed. The Sunday Express understands at-least M1.2 billion was needed to build the hospital, while government could only raise M400 million.
“It was not easy for government to get the money from the budget to build the hospital. More money was also be needed to build the road to the hospital and for the costs of water and electricity connections,” Dr Thahane said.
He further said for the project to happen, government had to seek assistance from the PPP — something he said other progressive governments around the world have resorted to when their limited budgets cannot carry them through their projects.
Dr Thahane further noted thorough research and consultation with local experts were made to weigh-up the advantages and disadvantages of entering into the PPP agreement.
Validation of the project was subsequently made, and the PPP asked to build the hospital, while government would pay back the money the project consumed in instalments, Dr Thahane said.
The repayment of the money would work “just like a mortgage when one has built a house through a bank loan”.
Dr Thahane continued: “The instalments would include the principal balance and the interest.
This would go on until government had finished paying the whole amount the PPP spent on the facility.
“It is worth noting that because the public sector has the required managerial skills, it was agreed that the PPP would run the hospital until such a time that government could do the work on its own.
“Until then, all the services would be paid to the private sector by government. These included the maintenance of the building and the costly machinery installed in it.”
The Tšepong consortium, which Dr Thahane said was being confused by people to be the owners of the hospital, was selected to handle the day-to-day management of the facility after further evaluations.
Dr Thahane emphasised a new hospital was needed because Queen II had become a liability.
“About M100 million was being used on Queen Elizabeth II Hospital every year. Even then, the money would run out after a short time and we would hear reports that the hospital was without drugs and other essentials.”
Dr Thahane also said he wanted to make it clear the PPP was not imposed on the government, but was born out of necessity.
“We needed a new hospital and the agreement seemed to be the appropriate option we had,” he said.
“Countries go for PPP agreements because their budgets are limited. The private sector has more money and skills than government.
“The private sector does research. Governments around the world use private sectors to utilise their resources and expertise to deliver public service,” he said.
Allegations in the Oxfam report that the PPP was gobbling public funds were incorrect and unfounded, he added.
According to Dr Thahane, representatives of different communities were invited to be part of the deliberations leading to the PPP agreement. However, he said “one by one, people lost interest” and stopped attending meetings.
“The first meetings were well-attended but as time went by, people stopped attending them, making excuses.
“The government was not going to make a unilateral decision on the project. The people were to be part of it but pulled out.
“The Oxfam report is totally wrong. The people who compiled it seemed not to have done enough research.
“The report was fascinated by the amount of money given to the hospital but ignored the finer financial details.
“What the compilers of the report should have done was the ‘with’ and ‘without’ financial analysis to ascertain whether or not Queen ‘Mamohato Memorial Hospital was eligible for the portion of money it received from the health sector budget.
“I believe that without the new hospital and with the old one, government would run into bigger costs than it currently incurs.”
Mr Chefa, whose organisation partnered with Oxfam in compiling the damning report, said their research was solid and they would stand be the findings.
Mr Chefa insisted government was wrong to enter into the agreement “because that was the same as selling out the people”.
Government, he added, should “never ever privatise healthcare to people whose aim is to make profit.
“The money that government is giving the hospital could have been used in improving primary healthcare services.
“Queen ‘Mamohato Memorial Hospital is taking the bulk of the money allocated for the health sector. That is a fact and we will not be moved by anyone,” he said.
Mr Chefa further said it was unnecessary to defend the project when the Minister of Health, Pinkie Manamolela, had admitted the project was problematic.
“Even the Prime Minister (Dr Thomas Thabane) said it on record that Tšepong was a mistake that had to be corrected. The project was ill-conceived.
‘We did not make up the findings in the report. We were informed by those who are running the government.”
He said it was also sad that after implementing the project, government “gave away the responsibilities of running it to foreigners” who he alleged were under-qualified.