Draft On Public Private Partnership Project Midland Health Campus: Assessment Answer
Draft On Public-Private Partnership Project Midland Health Campus
A project called Midland Health Campus was organised which was organized by the State and Common Wealth government and the private hospital that replaced the Swan Hospital. The new campus would have 300 beds for public patients along with 60 private beds. The overall capital budget for the project $360 million and the project infrastructure was $340 million. The primary objective of the project was to offer public service for 20 years under contract. The entire project began in the year 2012. The present report would evaluate the complexities of the project, the impact on the stakeholders with particular reference to Triple Bottom Line theory.
Complexity and challenges in the project
The project began with cost estimation of $360 million. The hospital was an imitative of the Australian government for extending the healthcare services to the ordinary people. However, the project encountered different challenges related to sustainability, and the impact was severe on the stakeholders. The first sustainability criteria which are essential for any health care organization is the budget and ensuring that the expenditure is appropriate and help the healthcare organization to attain sustainability. The first challenge which was encountered in the project was meeting the budget, and this hampered the sustainability. The expected budget doubled, and the amount was $520 million. This created an impact on the stakeholders like the owners, employees and also the patients. The expenditure increased and it created an impact on the regular expenses of the organization (Midlandhealth.org, 2019).
As per the terms of the contract, the local health services have to pay $390 million for an extended period of 30 years to the private organization for paying the debt and also fulfilling the interest amount. However, it is important to note that the private-public partnership has changed several times and thus it is known about the total amount of money which has been spent every time and then sold. Furthermore, the local health services have to pay money every year for the building and the purpose of maintaining the health care organization. This created pressure on local healthcare who are the critical stakeholders of the project (Engel, Fischer & Galetovic, 2013).
The challenges and the complexity of the new project can be explained with the help triple bottom line theory. This theory considers three parts to be important for assessing the success of the project and they are social, environmental and financial. Hammer & Pivo (2017) commented that several organizations had adopted this framework for assessing their performance with the aim to create higher value in the business. Considering the financial aspect, the project of Midland Health Campus has not attained success. The increased expenditure of the Midland Health Campus resulted in fund crisis for the local health organizations.
Impact on the stakeholders
The project of Midland Health Campus has a far-reaching effect on the stakeholders. The primary stakeholders of the organization are the owners, employees, suppliers, patient and the local community. The formation of Midland Health Campus has created benefit for the patients because the health care services extended and it helped the patients to get appropriate and quicker services. The contract with the private hospitals made the organization to pay $390 million for an extended period of 30 years. However, in case the government has obtained money directly at the interest rate of 5% then the total amount would be $159 million. The hospital cost would have increased by 150%. Thus, this created a benefit for the stakeholders (Midlandhealth.org, 2019).
However, the project also created a negative impact on the patents and the local health cares which hampered the people in the triple bottom line. The crisis in the fund affected the health services in Midland Health Campus as the money which was sanctioned by the Australian Government was not enough for covering all the expenses. This resulted in the closure of the Accident and Emergency Department of both the hospital.
Northouse (2018) commented that leadership is a crucial and practical skill that enables to lead an organization towards success. The leadership aspect of this project is guided by the mission of the project which is to provide high quality and proper care to the patients and ensure that the staffs and the physicians are treated well. However, the project has specific challenges related to leadership that hampered the project at the natal stage.
The improper management and ineffective formation of the contract have enhanced the cost of healthcare for the Australian government and also forced the reduction of the local health care services in the area. Furthermore, even after the closure of the expensive deal, the hospital would be owned by the private sectors instead of being sent to the public sector.
The contract which was developed for the project was unable to offer strategic value to its stakeholders. The first and foremost reason was the increasing cost of the project. The PFI contract includes a break clause which was after 30 years, and by then all the debt would have been paid. This would have freed the local health services from all sort of high payments. After using the break clause, the land would have remained under the ownership of the private organization and the government need to pay $28 million for the same. In case the break clause is not utilized then the contract would continue for another 30 years and the service would increase (Munns, 2017). This portion of the contract completely devastated the strategic value.
Impact on the environment
The project has created a positive impact on the environment like the hospital as it has undertaken measures to reduce its impact on the environment. The impact of the organization has not been suitable on the profit and the people owning it its improper leadership and increased cost. Following Part IV of the Environment act 1995, the hospital has ensured the air quality and reduced air pollution (Therivel & Paridario, 2013).
The scope of improvement and Conclusion
There is still scope for improvement for its people and profit aspect. The project needs to focus on the contract and ensure that all the expenditure are managed and covered accurately. The contract can be renewed and the changed paid by the local services can be reduced.