Published On: Tue, Mar 5th, 2019

A bit of a disappointment

SMMC Group Photo Groundbreaking for construction new general hospital

By Hilbert Haar

During the groundbreaking ceremony for the new hospital, in early December 2018, everything seemed to be nice and dandy. Alesandro Cambri of contractor INSO was present at this photo opportunity where many dignitaries posed with shovels in front of an excavator and where St. Maarten Medical Center Director Kees Klarenbeek declared that construction would begin in March 2019 – which is like, now.

But as these things go with huge projects, dark clouds are hanging over INSO, the Italian contractor that beat Vamed in the tender process. Its parent company Condotte is in financial trouble and INSO is now under control of the Italian government and it is also up for sale.

SMMC is prepared to continue with INSO but the lenders, a consortium of pension funds, banks, social and health insurances SZV and the World Bank trust fund are not convinced. The consortium is still in the process of doing its due diligence to determine whether INSO can still be entrusted with the project.

Condotte and INSO are both under Extraordinary Administrative Procedure – the Italian system for bankruptcy protection. This does not mean that these companies are bankrupt as a poorly informed local web site suggested; it means that debts are frozen (until the end of this year) and that government-appointed commissioners in the meantime run the companies. Restructuring or selling are two options.

Whatever happens, it seems to me that the whole hospital project is up in the air right now and that it is at least in for some serious delays. In the worst case scenario, the SMMC will have to terminate the contract with INSO and issue a new tender.

All that will take time and money. It seems to me that St. Maarten will have to wait a while longer before the doors of its sorely needed new general hospital will open. The way I see it, it is not going to happen in 2021, as Klarenbeek optimistically projected back in December.

Is that a disaster? Not really; it is a bit of a disappointment due to circumstances that are beyond the SMMC’s control.

It is better to await the outcome of due diligence by the lenders and act upon their findings than to ignore all warning signs and pretend that everything is alright.

general-hospital

Photo caption: Rendition of the new general hospital to be constructed on the site of the St. Maarten Medical Center (SMMC) in Cay Hill.

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