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The health care contract
Published on August 28, 2012 Email To Friend    Print Version

In 2008, the Turks and Caicos Islands (TCI) government entered into an agreement with Interhealth Canada for the construction and operation of two new hospitals – one in Providenciales and the other in Grand Turk – and the provision of associated secondary health care for TCI residents.

Since then, the contract with Interhealth Canada has remained a source of considerable controversy in the TCI for a number of reasons.

First, the contract itself has never been released for full public scrutiny. Late in his term of office, in response to public pressure, then Governor Gordon Wetherell permitted one-hour viewings of the document. However, few took advantage of this full yet restricted disclosure, as they could not take away any information which, in the short time allotted, could only be partially read in any event.

Given the sheer size of the full document – comprising a total of 187 separate files and a mind-numbing 7,665 pages – Wetherell’s concession appeared to be disingenuous at best, paying only lip service to the concept of government transparency often promoted by the British Foreign and Commonwealth Office (FCO) but equally frequently ignored by it in practice.

Second, the enormous ongoing financial obligations created by the agreement, which ultimately have to be funded by the people of the TCI through new and increased taxation, have brought the territory to the verge of bankruptcy.

The new healthcare scheme is currently costing the administration some $60 million annually and, as well as effectively bankrupting the government’s finances, has resulted in civil service layoffs and major cuts in salaries, slashing of lease and rental payments to landlords and a drastic reduction of the education budget for overseas scholarships.

Medical services have been highlighted by CFO Hugh McGarel Graves as the most expensive portion of government spending at $60 million per year or $2,000 each for every man woman and child in the TCI.

Despite the expensive health care costs incurred by the new National Health Insurance Plan (NHIP) and Interhealth Canada, there have been ongoing complaints over the quality and availability of primary healthcare services, which until his recent resignation were the responsibly of new Progressive National Party (PNP) leader Dr Rufus Ewing as the former director of medical services.

In fact, current Governor Ric Todd spoke out publicly against the then Ewing-run health services, labeling them a “poor level of primary health care”.

After the NHIP came into being in April 2010, Ewing had the responsibility for managing primary care in the TCI and Interhealth Canada took over the responsibility for hospital management and secondary care.

Third, in addition to the cost of the NHIP that requires mandatory insurance payments for the provision of healthcare in the TCI, islanders have been up in arms over the cost of construction of the two new hospitals initiated by the former PNP administration, which were originally estimated to cost under $50 million.

The two small two-storey hospitals – one in Provo with 20 beds and the other in Grand Turk with 10 beds – are encumbered by a mortgage of $235 million. If the mortgage runs its full 24-year course with interest, the buildings will have cost TCI residents half a billion dollars.

The hospital construction contract was awarded to local contractors Johnston Construction (now in liquidation) without an open bidding process.

A new hospital recently built in the Virgin Islands has been reported to have cost $90 million, with 6 storeys and 122 rooms.

Fourth, the Interhealth contract and the NHIP has become something of a political hot potato, with PNP leader Ewing scrambling to distance himself from it.

At the time, the scheme was touted by Ewing and others in the upper echelons of the then PNP government as a move to save millions of dollars from a bloated medical treatment abroad program.

However, since becoming leader of the PNP, Ewing has claimed that, as director of medical services, he was not responsible for making the decisions that brought the NHIP into being.

“I do not and did not have the expertise to make those decisions,” said Ewing.

“This was the responsibility of the ministers and those within the Progressive National Party... I was only an adviser,” he went on to say.

Ewing’s claim has, nevertheless, been contradicted by Royal Robinson, former deputy premier in the short-lived PNP administration of Galmo Williams, who has stated publicly that Ewing was a member of the inner circle that contracted with Interhealth Canada as the health services provider and with Johnston Construction as the hospital building contractor.

Government CEO Patrick Boyle has also stated that Ewing had a “central role in developing the policy that led to the creation of the NHIP”.

According to local media reports, a number of civil servants (believed to be five) received payments of as much as $20,000 each -- described as an "honorarium" -- for doing a "good job" in negotiating and concluding the health care contract with Interhealth Canada. Ewing is said to be one of the five civil servants that received such payments.

Given the government’s prior limited disclosure and in furtherance of the public’s right to know and the public interest generally, TCI News Now is now making the document available in its entirety (links open in a new window):

1.1 Title and Signatures (2 pages)
1.1.1 Project Agreement (179 pages)
1.1.2 Schedule 1 Definitions and Interpretation (52 pages)

1.2 Schedules 2 and 4 to 11 (inclusive) to project agreement (2 pages)
1.2.1 Schedule 2 Completion documents and plans (5 pages)
1.2.2 Part 2 Completion documents to be supplied by TCIG (2 pages)
1.2.3 Part 3 Plan of Grand Turk site (2 pages)
1.2.4 Part 4 Plan of Providenciales site (2 pages)

1.3 Schedule 3 Part 1 and Part 2 to Project Agreement (4 pages)
1.3.1 Part 1 Clinical Services Specification (175 pages)
1.3.2 Part 2 IM&T Specification and Technical Guidance (92 pages)
1.3.3 Part 3(a) Service Level Specifications (176 pages)
1.3.4 Part 3(b) FM Strategy (135 pages)
1.3.5 Part 3(c) Lifecycle Model: Grand Turk (14 pages)
1.3.6 Part 4 New Equipment Tests on Commissioning (3 pages)
1.3.7 Part 5 Implementation Plan and Implementation Programme (24 pages)

1.4 Schedule 4 Staffing Strategy (29 pages)
1.4.1 Appendix A - TCI Project Full Staffing Schedule (11 pages)
1.4.2 Appendix B - Medical Staff Recruitment (4 pages)
1.4.3 Appendix C - Nursing Staff Methodology (7 pages)
1.4.4 Appendix D - International (and Local) Staffing Timetable and Process (2 pages)
1.4.5 Appendix E - Clinical & Workforce Policy Development Plan (9 pages)

1.5 Schedule 5 Dispute Resolution Procedure (16 pages)

1.6 Schedule 6 Performance Monitoring and Payment Mechanism (13 pages)
1.6.1 Section I : Non-Clinical Services (37 pages)
1.6.2 Section II : Clinical Services (62 pages)

1.7 Schedule 7 Change Procedure (24 pages)

1.8 Schedule 8 Record Provisions (5 pages)

1.9 Schedule 9 Compensation On Termination (42 pages)

1.10 Schedule 10 Handback Procedure (7 pages)

1.11 Schedule 11 Insurance Requirements (46 pages)

1.12 Schedule 12 Financial Model (1 page)

1.13 Schedule 13 Construction Requirements (3 pages)
1.13.1 Part 1 Works Stipulations (4 pages)
1.13.2 Part 2 Provider’s Construction Proposals (30 pages)
1.13.3 Part 3 Form of Appointment of an Independent Tester (38 pages)
1.13.4 Part 4(a) Form of Collateral Warranty from Devereux Architects (28 pages)
1.13.5 Part 5 Form of Collateral Warranty from Critical Sub-Contractors (13 pages)
1.13.6 Part 6(a) Form of Collateral Warranty from Construction & Services Co (18 pages)
1.13.7 Part 7 Form of Collateral Warranty from Building Contractor (13 pages)

1.14 Schedules 14 to 25 (inclusive) to Project Agreement (2 pages)
1.14.1 Review Procedure (for Programmed Maintenance (5 pages)

1.15 Schedule 15 Form of Lease (16 pages)

1.16 Schedule 16 Not Used (1 page)

1.17 Schedule 17 NHIB &TAP Procedures (10 pages)

1.18 Schedule 18 Form of Development Order (6 pages)

1.19 Schedule 19 Initial Inventory (4 pages)

1.20 Schedule 20 New Equipment: Grand Turk Site (67 pages)

1.21 Schedule 21 Refinancing (8 pages)

1.22 Schedule 22 Form of Funders' Direct Agreement (23 pages)

1.23 Schedule 23 Value Testing Procedure (21 pages)

1.24 Schedule 24 Indicative Equipment Cost Profile (2 pages)

1.25.1 Schedule 25 Part A: Form of Chattel Mortgage (16 pages)
1.25.2 Schedule 25 Part B: Form of Account Charge (22 pages)

2.1 Ringfenced Services Support Deed (42 pages)

2.2 Ringfenced Services Support Deed Corporate Guarantee (12 pages)

2.3 Ringfenced Services Subcontract and Schedules 1 and 2 (186 pages)
2.3.1 Schedule 3 to the Ringfenced Services Subcontract (301 pages)
2.3.2 Schedule 4 to 26 (inclusive) to the Ringfenced Services Subcontract (266 pages)

2.4 Design and Build Contract (146 pages)
2.4.1 Schedules of the Design and Build Contract Volume 1 (351 pages)
2.4.2 Schedules of the Design and Build Contract Volume 2 (479 pages)

2.5 Design and Build Contract Corporate Guarantee (27 pages)

2.6 Parent Company Guarantee (10 pages)

2.7 Contract Agreement (202 pages)

2.8 Performance Security For Construction Works (10 pages)

2.9 HSBC Guarantee (12 pages)

2.10 United Insurance Company Guarantee Bond (14 pages)

2.11 Johnston International Limited Bond (5 pages)

2.12 Co-operation Agreement (48 pages)

2.13 Appointment of a Provider's Representative (18 pages)

2.14 Deed of Professional Appointment (Architect) (86 pages)

2.15 Deed of Professional Appointment (Structural Engineer) (91 pages)

2.16 Facilities Management Sub-Contract (130 pages)
2.16.1 Schedules of the Facilities Management Contract (3 pages)
2.16.2 Schedule 1 Definitions and Interpretations (102 pages)
2.16.3 Schedule 3 Part 3(a) FM Service Level Specifications (504 pages)

2.17 FM Contract Corporate Guarantee (14 pages)

2.18 Commercial Lease (15 pages)
2.18.1 Commercial Lease (15 pages)

2.19 Appointment of an Independent Tester (37 pages)

2.20 Management Services Agreement (18 pages)

2.21 Deed of Collateral Warranty (11 pages)

2.22 Deed of Collateral Warranty (Architect) (10 pages)

2.23 Deed of Collateral Warranty (Structural Engineer) (9 pages)

2.24 Deed of Warranty in favour of the Provider (10 pages)

2.25 Contract of Insurance (24 pages)

2.26 Arbitration Agreement (8 pages)

2.27 Bond Value Reduction Memorandum (6 pages)

2.28 Ulster Bank Limited Guarantee (5 pages)
2.28.1 Ulster Bank Letter (1 page)

2.29 Deed of Collateral Warranty (12 pages)

2.30 Deed of Collateral Warranty (Architect) (9 pages)

2.31 Deed of Collateral Warranty (Structural Engineer) (10 pages)

2.32 Deed of Warranty in favour of TCIG (7 pages)

2.33 Direct Agreement (33 pages)

2.34 Deed of Collateral Warranty (9 pages)

2.35 FM Deed of Collateral Warranty and Guarantee (8 pages)

2.36 Schedule of Subcontract Special Conditions RIL Subcontract (19 pages)

2.37 Performance Security for Sub-Contract Works (8 pages)

2.38 Performance Security for Sub-Contract Works (7 pages)

2.39 Ulster Bank Limited Guarantee (9 pages)

3.1 Credit Agreement (244 pages)

3.2 FirstCaribbean International Bank Letter (2 pages)

3.3 ISDA 2002 Master Agreement (38 pages)

3.4 ISDA 2002 Master Agreement (37 pages)

3.5 HSBC Letter Agreement (9 pages)
3.5.1 HSBC Letter Agreement (5 pages)

3.6 Debenture (56 pages)

3.7 Collateral Charge (78 pages)

3.8 Collateral Deed of Share Pledge (31 pages)

3.9 Security Trust Deed (47 pages)

3.10 Standby Letter of Credit (10 pages)

3.11 Intercreditor Deed (54 pages)

3.12 Funders' Direct Agreement (22 pages)

3.13 Subcontractor's Construction Direct Agreement (31 pages)

3.14 Subcontractor's FM Contract Direct Agreement (31 pages)

3.15 Deed of Collateral Warranty (19 pages)

3.16 FM Deed of Collateral Warranty (6 pages)

3.17 Deed of Warranty in favour of Funders (12 pages)

3.18 Deed of Collateral Warranty (Architect) (11 pages)

3.19 Deed of Collateral Warranty (Structural Engineer) (11 pages)

3.20 Collateral Deed of Charge (47 pages)

3.21 Mezzanine and Subordinated Loan Stock Security (24 pages)

3.22 Security Agreement (5 pages)

3.23 Notice Interhealth Canada (202 pages)

4.1 Subscription Agreement (25 pages)

4.2 Shareholders' Agreement (58 pages)

4.3 Instrument by Deed Poll (28 pages)

4.4 Instrument by Deed Poll (28 pages)

4.5 Register of Members (3 pages)

4.6 Register of Members (5 pages)

4.7 Corporate Documents (24 pages)

5.1 Director's Certificate (103 pages)

5.2 Director's Certificate (58 pages)

5.3 Director's Certificate (58 pages)

5.4 Director's Certificate (29 pages)

5.5 Director's Certificate (41 pages)

5.6 Director's Certificate (133 pages)

5.7 Director's Certificate (47 pages)

5.8 Director's Certificate (49 pages)

5.9 Director's Certificate (35 pages)

5.10 Corporate Documents Devereux Architects Limited (22 pages)

5.11 Corporate Documents Civil & Structural Engineering Limited (38 pages)

5.12 Corporate Documents Rotary (International) Limited (17 pages)

5.13 Director's Certificate (58 pages)

5.14 Director's Certificate (26 pages)

5.15 Director's Certificate (56 pages)

5.16 Director's Certificate (48 pages)

5.17 Director's Certificate (24 pages)

5.18 Director's Certificate (25 pages)

5.19 Director's Certificate (29 pages)

5.20 Director's Certificate (90 pages)

5.21 Director's Certificate (40 pages)

5.22 Director's Certificate (45 pages)

5.23 Certificate of the Cabinet Secretary (4 pages)

6.1 Letter Ministry of Health and Human Services (2 pages)

6.2 Letter Ministry of Health and Human Services (36 pages)

6.3 Letter Ministry of Health and Human Services (1 page)

6.4 Letter Ministry of Health and Human Services (5 pages)

6.5 Letter Ministry of Health and Human Services (6 pages)

7.1 Letter Attorney General (4 pages)

7.2 Letter Misick and Stanbrook (17 pages)

7.3 Letter Misick and Stanbrook (8 pages)

7.4 Letter Misick and Stanbrook (17 pages)

7.5 Letter Chancery Chambers (8 pages)

7.6 Letter Cassels Brock (14 pages)

7.7 Letter Cassels Brock (10 pages)

7.8 Letter Blakes (4 pages)

7.9 Letter Miller Simons O’Sullivan (7 pages)

7.10 Letter Lovells (9 pages)

7.11 Letter Berwin Leighton Paisner (8 pages)

8.1 Business Licence Certificate (3 pages)

8.2 Grant of Building Permit (17 pages)

8.3 Grant of Building Permit (17 pages)

8.4 Broker's Letter of Undertaking (45 pages)

8.5 Broker's Letter of Undertaking (42 pages)

8.6 Due Diligence Report (93 pages)

8.7 Miller Simons O’Sullivan Response to Financing Due Diligence Questions (19 pages)

8.8.1 Certificate of Title (31 pages)
8.8.2 Certificate of Title (31 pages)

8.9 Contractual Structure (1 page)

9.1 Letter FirstCaribbean International Bank (2 pages)

9.2 Letter FirstCaribbean International Bank (1 page)

9.3 Letter FirstCaribbean International Bank (1 page)

9.4 Borrower’s Notice of Withdrawal (3 pages)

Document Index (37 pages)


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Comments:

Royal Robinson:

David you continue to misrepresent what I have said! I have consistently said that our team of local advisors to the hospitals contract was made up of the following: Delton Jones, Finance; Rhondalee Knowles, Legal; Dr. Rufus Ewing, Clinical Services; Denise Saunders, Human Resources; Benjamin Robinson and Lorraine Kenlock, IM&T; Royal Robinson, Design and Infrastructure. Each of us was in turn advised by UK consultants: PWC, Eversheds, Tracks,Ove Arup and Nightingale's. So please stop printing falsehoods and misrepresentation of the facts. The project was a PPP and as such we were all advisors to the government and not the final decision makers. Get that through your thick skull

Concerned:

Royal,

Let me ask, and maybe I too, can get it through my thick skull, did all the other advisors too, got the honourariums, or was it just us TCI representation?

Help us to understand, maybe, all skulls are thick!

Concerned


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