In the old days, when the newspaper was a gentleman the expression “it was in the newspaper so it must be true” still had a lot of credibility. With the rise of electronic media the landscape has changed forever – and not always for the better. Anyone with half a brain who has a computer and access to the internet is able to ‘publish’ anything that tickles their fancy.
In this world of half-truths and outright lies, the local gossip website SMN-News takes a special place because of its ability to misunderstand information, twist it for the purpose of someone’s political agenda or simply write whatever pleases the highest bidder. Mind you, that last observation is a mere suspicion, based on garbled writings that seem to have as their main objective to create confusion and to discredit certain initiatives for obvious political purposes.
We’re not in the business of defending anyone – because they are very well capable of doing this themselves - but we think it is justified to provide at least our readers with the correct information.
This is, of course, about the hospital project. We know that the previous UP-led government was busy with the Austrian company Vamed and that the current government put a stop to it, replacing it with a public bid for the construction of a new hospital. Vamed was one of the three bidders and the company did not win. It therefore objected to the tender result, as this newspaper extensively reported last Friday. The objection did not lead to a different ranking of the bidders: 1. Inso, 2. BAM/Philips and 3. Vamed.
Does this mean that Inso will build the hospital? Hmm, not so fast. When the results of the tender were announced, Inso was indicated as the “nominated winner.”
Currently, contract negotiations are underway to seal the deal. If parties do not come to an agreement, things could still change and the project could go the number two bid.
One of the more confusing things SMN-News reported about was that there was no dialysis center in the new hospital plan. That is actually correct, but it does not mean that there will not be such a center. On the contrary, the way we understand it, the need to expand the current dialysis center is so high, that it cannot wait for the completion of the new hospital.
Therefore, a reservation has been made for the construction of a separate building to house the expanded center. Of course the tender document for the hospital bid does not contain further explanation; that’s not necessary because all the bidders have to know is that they should not put a helicopter pad or anything else in that particular location.
Then there is the thing about the so-called ‘special purpose vehicles’ that could or could not become part of the project. SMN-News has created the impression that there is a dark motive behind all this: the minister wants to transfer money from the old age pension fund to such a vehicle (a legal entity) to escape control by the supervisory board of directors of SZV.
But wait a minute: all this hangs together with the financing of the project. At the moment it is not certain who will become the owner of the new hospital” SZV, the government, or another entity.
There are at least three financing options; the first one is that the contractor offers financing; the second one is that SZV finances the project; and the third option – the preferred one – is that the government finances it from its capital investment budget.
The latter option gives access to cheap money, because the Dutch government would have to subscribe to the loan and the interest rate would be somewhere between 1 and 2 percent. If this happens, the government becomes the hospital’s owner.
If SZV finances the deal it becomes more expensive; SZV gets a return on investment of 5 percent for financing the completion of the Government Administration Building and it stands to reason that it expects a similar yield on the hospital project. In this scenario, SZV would become the owner.
There are however variations in the mix, for instance when SZV finances part of the project and a loan through the capital investment budget comes through later. Or when SZV lets in a third party in on the financing – the general pension fund APS comes to mind here. In that case the partners in the project would want to set up a special purpose vehicle – an entity in which the financial backers each take a percentage.
In other words – there is nothing wrong with these special purpose vehicles. They only sound weird to people who do not understand these constructions and then jump to the wrong conclusions.
Another point is the presentation of the outcome of the evaluation process to the supervisory board of SZV and to the Council of Ministers. SMN-News suggests that this was not done. Again: correct, but also misinterpreted, because the contract negotiations with Inso have not been completed yet. When that is done, the presentation will be made to the supervisory board and to the Council of Ministers.
Oh, and what about financing the hospital from the old age pension fund? That should not be a problem at all. An actuarial report by Keesen states that the AOV-fund will accumulate reserves to the tune of 1 billion guilders in 2030. According to an advice from the Social Economic Council about the AOV, this is “an extraordinary amount for a fund that is essentially of the pay-as-you go variety.”
The website writes that the contract SZV is about to sign on August 31 is misleading. That in itself is a remarkable statement, because right now there is no contract since the negotiations are still ongoing. So who is misleading here?