By KELLY LOUISEIZE
Government just does not have the means to finance and build large public infrastructures like hospitals anymore, according to the Ministry of Public Infrastructure and Renewal.
The public and private sector needs to pool their resources to make future developments happen, says Minister David Caplan.
This is why Sault Ste Marie will be looking for private contributors in developing the new Sault Area Hospital.
In examining procurement options, the ministry decided Alternative Financing Procurement (AFP) would be the best option for financing and implementing large projects. It allows projects to run more fluidly, meeting budgets and time horizons.
“The old system wasn’t working,” says Caplan in a government report. “Our hospitals are on average 40 years old.”
Adequate hospitals need to be built and the new procurement process will allow this to happen, he says.
Alternative Financing and Procurement means that construction work will be financed and carried out by the private sector, which will assume the financial risks if the project is not finished on time and on budget. Once the facility is built, it will be publicly owned, controlled and accountable.
It makes sense to Brady Irwin, vice-president of public affairs for the Sault Area Hospital, since it will reduce costs in the long run.
“It’s something called life cycle cost,” Irwin says.
The province will assume 70% of the $200-million project’s cost and the remaining 30 per cent ($60 million) will be raised locally. The local portion will be shared among with the City of Sault Ste. Marie and Algoma districts communities, Sault Area Hospital, and Sault Area Hospital Foundation.
Fundraising efforts underway
“The city has already volunteered to raise a portion of the $60 million through a tax levy and contribution of a share of the casino revenue that they are entitled to,” James Melville, president of the Sault Area Hospital Foundation says.
Construction and finance companies will be receiving payments for the duration of the contract once the work is complete.
“The feedback we are receiving from the business community is very positive,” Irwin says.
Various members of the business sector sit on the hospital board and the notion that it will bring private sector accountability into the project is “very appealing to many of them,” he says.
The Sault has had the benefit of learning from other communities’ mistakes. Negotiations will be detailed in order to avoid misunderstandings.
That said, there is some trepidation in allowing private companies to invest in public projects.
Irwin says the 600,000 square foot facility will have up to 289 beds - the same amount the city now houses in both the General and Plumber Memorial site, so nothing has changed. But the new facility will attract new doctors, since recruits are looking for modern hospitals with fresh influx of new technology to work in.
It is clear the government has placed the Sault Area Hospital as a priority, Irwin says. If there is one message ringing home it is that “our hospital is coming.”
“We believe we will be breaking ground next fall or the following spring.”
