In the early 2000s, rising healthcare costs and ageing facilities prompted the South Australian government to commission plans for a new major metropolitan hospital. This meant merging two existing city hospitals and spending in excess of $2 billion. It would be the most significant single investment in health care in South Australia’s history. The Government determined that a Public-Private Partnership would be the best way to raise the funds and contain costs, whilst getting the hospital built as quickly as possible. Then Treasurer, Kevin Foley, was all set to forge ahead in 2008 when the Global Financial Crisis hit and severely curtailed corporate lending. It wasn’t the only problem to overcome. A significant number of clinicians objected to the project and went public with their concerns. Would the new hospital still go ahead, on time and on budget? Would it still represent value for money?
This case looks at how the value of Public Private Partnerships can be measured and the issues they may come against – including financial and political. It can be used to discuss how procurement can be managed, looking beyond cost to other considerations.
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