By John Skippings
As a part of the preamble to the 800-page contract between Interhealth Canada Construction & Services (TCI) Limited and the now defunct Johnston International Limited:
John Skippings is a former Director of Tourism and Chief Marketing Officer for the Turks and Caicos Tourist Board 1999-2003; and Tourism Marketing Consultant with the Montserrat Tourist Board 2004 - 2006. And has had a career in banking in The Bahamas and the US; he holds a Bachelor of Science in Public Administration from Southeastern University in Washington, DC. Email: email@example.com
“The Crown (in right of its Government in the Turks and Caicos Islands) ("TCIG") currently provides a national health service that consists of primary care, two low-tech hospitals; Grand Turk Hospital operating 20 medical/surgical beds and the Myrtle Rigby Health Complex on Providenciales operating 10 medical/surgical beds.”
This was an accurate description of the country’s facilities at the time, which although aged, readily provided healthcare to everyone.
That contract in turn gave the country, in replacement, 10 hospital beds in Grand Turk, the country’s capital island, and Providenciales, the most populated island, 20 hospital beds. And these 30 beds:
“The Crown (in right of its Government in the Turks and Caicos Islands) and Interhealth Canada Infrastructure (TCI) Limited ("the Provider") have entered into an agreement of even date with this Deed ("the Project Agreement'? for the provision of primary and secondary healthcare services for the Turks and Caicos Islands including the design, construction, financing, equipping, staffing, maintenance and operation of the facilities for a period of 25 years ("the Project").”
“The Employer hereby covenants to pay the Contractor, in consideration of the execution and completion of the Works and the remedying of defects therein, the lump sum of US$67,119,617.27 which shall be the lump sum fixed price total for the Works (being US$38,562,019.51 for the Providenciales Section and US$28,557,597.76 for the Grand Turk Section) shown by the Contract documents set out in Clause 2 subject to any adjustments (if any) in accordance with the Contract (the “Contract Price”) at the times and in the manner prescribed by the Contract.”
Now, at US$28,557,597.76 for the Grand Turk 10-bed Section, that works out to $2,855,759.78 per bed; while Providenciales’ 20-bed facility at a cost of US$38,562,019.51, came at a cost of $1,928,100.98 per bed. And why Grand Turk’s 10 beds cost 68% more than the Providenciales 20 beds, I confess to not knowing. The two islands are 60 miles apart, the materials for construction for both hospitals had to be imported, mostly from the US, docking facilities and utilities – electricity, water and communications on both islands were state-of-the-art, and labour costs were about the same.
Then there is the mystery of how a loan for the hospitals contract by FirstCaribbean International Bank to Interhealth Canada for $118,519,821, with $67,119,617.27 of that paid to its sister company Johnston International to build the hospitals, result in annual obligations by the Turks and Caicos people to Interhealth Canada of in excess of $60 million per year, over a 25-year period? As well as how was the difference between the loan and the amount paid to the contractor spent?
The construction loan of $118,519,821, made by FirstCaribbean International Bank (Bahamas) Limited of Providenciales, Turks and Caicos Islands, to Interhealth Canada Construction came under three categories. The first totaling $56,809,860, at 0.35%; the second for $13,490,650 at an average rate of 1.82%; and the third in the amount of $48,219,311 at an average rate of 2.51%, totaling $118,519,821. Over the 21-year period, the interest would be approximately $18,742,481.71, making for a total repayment of around $137,263,058.77.
But what appears to have happened, is that Interhealth Canada borrowed the funds from FirstCaribbean International Bank at a reasonable rate, and in turn, loaned the same money to the Turks and Caicos government for construction of the 30 beds, or 60 beds, as you will see below, according to some estimates at around 12%. And not only might such a rate be usurious, but it would have to be questioned whether, or not Interhealth Canada is a qualified lender, if indeed, this is what happened.
When questioned in parliament about the Interhealth Canada-run National Health Insurance Plan (NHIP) and its cost to the Turks and Caicos people, the then United Kingdom minister overseeing the Turks and Caicos Islands, Henry Bellingham replied: “The contract with Interhealth Canada is a matter for the Turks and Caicos Islands (TCI) government.” A different stance of course, was taken with the suspected “systemic corruption” and the subsequent ongoing mega trial, which the hospital contracts might very well have figured into.
The project comprises the construction and operation of a general hospital in Zywiec (“Zywiec Hospital”), located in a small town in southern Poland, through a Public-Private Partnership (“PPP”) project. InterHealth Canada Zywiec (“ICZ”) is a special purpose vehicle formed for the sole purpose of executing the Zywiec Hospital PPP concession awarded to InterHealth Canada Limited – an international healthcare management company. The proceeds of the Bank’s financing (along with shareholder funds) are to be used for the design, construction, equipment and commissioning of the Zywiec Hospital. Under the PPP contract ICZ is obliged to design, build, equip and operate the hospital for a 30-year period.
PLN 194 million (EUR 45 million equivalent). And approximately US$48 million at today’s rate.
And the Zywiec Hospital in Poland comprises a “four-storey, 24,000 m2 building, [with] the hospital… featuring an integrated surgery ward based on a “hospital within hospital” concept, an emergency unit with a landing strip for ambulance helicopters, and an expanded range of ambulatory clinics”.
Compare this with Turks and Caicos’ 30 hospital beds for $118,519,821, and one will easily see why the 35,000 Turks and Caicos people feel shafted, paying some half a billion dollars over a 21-year loan. No comparison, really. Which perhaps is why former chief financial officer (CFO), Hugh McGarel-Groves, called the NHIP “the biggest financial mess I have had to sort out since I have been here… it is an absolute scandal.”
Initially, the Turks and Caicos people were led to believe by their government that there would be a total of 60 hospital beds, 20 in Grand Turk, and 40 in Providenciales. And according to a blog of one of the country’s leading developers, “To allow for initial requirements and future development, only half of these  beds will be commissioned during the construction process and a further 30 beds fitted out as population grows.” The people were informed that the 60 rooms would cost the taxpayers $75 million.
Then mysteriously and without any explanation to the people – who would be subsequently heavily taxed to pay for the project -- 60 beds for $75 million, morphed into 30 beds for $125 million. Puzzling, and one of the things that legal and accounting experts could determine should there be a forensic examination, or commission of inquiry is whether, or not the country is paying Interhealth Canada for 60 beds, or half that number. According to the above, it appears that a total of 60 beds would be constructed, but only 30 fitted out for now, and the remaining 30 beds as they become needed.
And while, according to the contract:
“The Crown (in right of its Government in the Turks and Caicos Islands) of Government Compound, Grand Turk, Turks and Caicos Islands, British West Indies ("TCIG") and Interhealth Canada Infrastructure (TCI) Limited (Registered No 11069) of Richmond House, PO Box 127, Leeward Highway, Providenciales, Turks and Caicos Islands, British West Indies ("the Provider") have entered into an agreement of even date with this Deed ("the Project Agreement") for the provision of primary and secondary healthcare services for the Turks and Caicos Islands including the design, construction, financing, equipping, staffing, maintenance and operation of the facilities for a period of 25 years ("the Project")”.
During my own perusal of the 800 pages, nowhere did I see the actual number of beds to be built. Although I am not saying that it is not there.
One question being continuously asked, understandably, by the Turks and Caicos people is, “Why is it that if the British government so keenly on appointed a commission of enquiry to examine 'systemic corruption' – and rightfully so – in the Turks and Caicos, at the cost of many millions of dollars to their small treasury, there seems to be no interest in examining a seemingly flawed healthcare deal, crafted in the UK -- the administering country -- with potentially many, many millions of dollars in overcharges at stake?”