How to cure the ills of Chile’s hospital concessions

Public-sector officials and representatives from concessionaires agree that contract improvements are needed to accelerate Chile's hospital concessions. 

There are currently 18 hospital concessions in the construction phase, and 13 have been awarded to build 24 facilities since 2009. 

“The goal should be that once a concession is awarded, the issue of the terrain has been cleared,” Fernando Ruiz de la Torre, general manager of Sacyr Concesiones Chile, told a hospital concession-focused webinar held by the country’s school of engineers.

Terrain studies related to archaeology and geology should be carried out before the contract is awarded to prevent unexpected delays, he said.

Today, the concession for La Unión hospital of the Los Ríos-Los Lagos network (US$290 million) has its construction works halted because of archaeological findings. And the new Salvador hospital in Santiago (US$275mn) has been halted for years due to the same reason.

The government has said it will push for a reform of the monuments council, the agency in charge of assessing these findings, as part of current efforts to reduce permitting times.

The head of the public works ministry's concessions division, Juan Manuel Sánchez, pointed out at the same event that hospitals are the second-biggest segment in his portfolio in terms of project numbers, only behind highways. 

In terms of improvements, he said contracts need to be more flexible since requirements laid out by the health ministry, which is the actual project owner, differ widely from other agencies that the public works ministry works with. 

“Because this is a contract it creates a certain rigidity that the health sector could see as a straitjacket. It would prefer more flexibility,” Sánchez said, mentioning issues such as adapting infrastructure to emergency situations like the COVID-19 pandemic.

He also said there is a myth among health sector officials, and even some private sector actors, that concession contracts cannot be modified once signed. This represents an information challenge so that all parties are aware of how concessions actually work, Sánchez added.