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City of Health On Life Support

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City of Health on life support


The project, which began in May 2012, with plans to open in May 2015, is 65% complete

Posted 18/05/2019

Panama’s  City of Health continues on life support after yet another failed attempt to revive its flagging recovery program.

The future of the flagship project of the Ricardo Martinelli era, once destined to carry his name is not yet clear to the authorities of the  Social Security Fund (CSS) reports La Prensa.

The first phase of the project in Ancon did not finish in April, as established in a delivery schedule prepared in 2018 with the Consorcio Construcciones Hospitalarias, SA (comprising FCC Construcción and FCC Construcción of Central America).

The National Directorate of Infrastructure and Support Services of the CSS set a work plan for the works to be concluded in stages.  in April 2019 the Cardiological Institute and the Nephrological Institute, among other areas, had to be completed and approved, until last February their advance was 68%.

Next November the general hospitalization area for adults, the surgical unit, the intensive care units, the genetics laboratory and the auditorium were to be ready. None will be delivered on the scheduled date.

The work, which began to be built in May 2012 with plans to complete in May 2015, has been delayed fpr four years and overall progress of 65%,  only 2% more than that reported by the CSS in December last year.

The National Directorate of Infrastructure and Support Services of the CSS informed  La Prensa that the consortium must present a new schedule, which will be evaluated by the entity to issue the necessary recommendations to reduce delivery times.

In addition, the CSS says assured that once it has the new schedule, it will be able to disclose it with the delivery dates of each one of the five phases of the project, which also includes the construction of the new National Oncological Institute (ION).

 Guillermo Puga, representative of the workers before the board of directors of the CSS, said that the company could not finish the first phase of the City of Health because it did not have the necessary number of workers. "They [the consortium] committed to have 3,000 workers and only have 1,500 in the project," he said.

According to Puga, the CSS institution has already begun to apply fines to the company,

Winners and losers
The former president of the Panamanian Society of Engineers and Architects, Gustavo Bernal, said that with this project "it seems that who is winning is the contractor and not the State", because the CSS has had to invest more than agreed, due to restructuring. "We as an organization have followed up on the City of Health, and we are really concerned about the dilation and the over-cost," he warned.

Bernal said The engineer said that in the end, it will be a mega-project with a mega-cost, which will not have medical and technical personnel.

Former Comptroller Carlos Vallarino said that in the construction of the City of Health poor planning, lack of inspections and incorrect decisions. have converged.

Two government administrations have passed and the project, which is necessary for the insured population of the country, has not been completed, he said.



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City of Health 4 years behind  schedule


Posted 02/12/2019

The future of the City of Health t in Ancón is up in the air. A flagship project of the Ricardo Martinelli administration and once cited to carry his name, it has staggered from crisis to crisis with massive cost overruns and is four years behind schedule.

Now the  Social Security Fund (CSS) is evaluating the contractual effects of terminating the contract and what it would imply for the institution.

The Consorcio Construcciones Hospitalarias, SA (which is part of FCC Construcción and FCC Construcción de Centroamérica), in charge of the work, has not met the delivery dates of the first and second phases says the CSS. The first phase, includes the institutes of Cardiology, and Nephrology, among other facilities, should have been delivered during the month of April, according to the schedule agreed in 2018.

Meanwhile, the second phase, which integrates the general adult hospitalization area, the surgical block, the intensive care units, the genetics laboratory and the auditorium, was not delivered on the scheduled date, which was November 4, 2019,

The CSS  said that the consortium has not presented a new delivery schedule for the works, so it is in default.

The project began in May 2012 and was to be ready in May 2015 and advanced 65%, only 2% higher than that reported by the CSS in December last year.

The CSS already disbursed $323.5 million of the $554.2 million of the predicted cost. This figure includes an addendum of $36.7 million approved in 2017 to make requested changes to the work.

After assuming the position as director of the CSS, Enrique Lau Cortés said d that "the strategic objective of the new administration is to terminate the City of Health as soon as possible and put it at the service of the insured."

Lau Cortes said then that they will have a specialized team at the project site, to monitor day-to-day progress and compliance with the agreements agreed with the consortium.



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Martinelli health city boondoggle partly open in 2021


Posted 18/01/2020

The first hospital areas in the City of Health will be operational, in 2021 nine years after is launch was trumpeted by then-President Martinelli while his satraps in social security planned to name after him. Instead, it became a massive boondoggle via a company linked to bribery and corruption.

The project now records a global advance of 65%, but there are areas where progress is minimal. This project has an initial cost of $554.3 million dollars, but it is projected to end up costing an additional 40%.

During a  project tour on Saturday, January 18, the current director of the Social Security Fund (CSS), Enrique Lau Cortés, said:"We are not going to wait until the whole project is finished to put it into operation, we will go by phase to release pressure from the metropolitan complex that is saturated" He indicated that the first areas that will go into operation are cardiology, nephrology, and cardiovascular surgery.

Lau Cortés reiterated that they hope for February 15 to have the result of the negotiation they have with the Spanish company FFC, responsible for the project tendered in 2012.

"I cannot give details of the negotiation, but the atmosphere is positive," he said.

FCC has received payments for $323.5 million and currently, the Spanish justice maintains an investigation into the company on suspicion that it would have paid bribes in Panama to be awarded the project that has 17 buildings on a  29 hectares site.



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Ciudad de la Salud costará $800 millones

La obra fue adjudicada por $554.3 millones y hasta ahora se ha pagado a FCC $335.7 millones. Se estima que terminará costando unos $800 millones.
Ohigginis Arcia Jaramillo
04 sep 2020 - 12:32 AM


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President  demands respect from corruption-shrouded Spanish company


Posted 04/09/2020

Panama  President of Laurentino Cortizo has demanded respect from FCC the corruption shrouded  Spanish company that has been building the City of Health since 2012, with a scheduled four-years delivery date to  the Social Security Fund (CSS).

On a tour of the Capira district, Cortizo told journalists that it is important to speak to FCC “head-on” to insist that “there is a process that must be followed; But at this time of the COVID-19 pandemic, the country is in need of the paralyzed  City of Health, He described as "inconceivable" and "a mockery" to Panamanians that the FCC company is talking about millionaire debts by the Government of Panama when it is public knowledge that the company was involved in "irregularities" in previous administrations.

The company the payment of $65 million from the CSS for "extended stay" during the period from June 15, 2015, to December 2019, in the construction of the hospital project.

The megaproject was tendered during the government of Ricardo Martinelli (2009-2014) and its delivery date was July 2015.

When the administration of Juan Carlos Varela (2014-2019) was installed, 36 irregularities were detected in the work, which the firm had to correct:"The figures that FCC produces  are incorrect," said Cortizo, who added that a due process  is taking place in other countries and Panama obviously has to follow-up, for which he emphasized that it is inconceivable to say  that Panama owes FCC

.The  Spanish Special Prosecutor's Office against Corruption and Organized Crime recently asked Panamanian authorities to collect information on transfers made from bank accounts to former Panamanian officials for the period 2009-2014.



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Martinelli unfinished flagship disaster will cost $800 million


The unfinshed Health City

Posted 04/09/2020

The controversial City of Health that was to have been a flagship project of the Martinelli administration and was even designated to carry the former president’s name has become instead a symbol of maladministration and corruption and will end up costing about $800 million instead of the  $554.3 million projected in 2012 and eight years later is still unfinished.

On Thursday, September 3 The Social Security Fund (CSS) released its roadmap to conclude the project: administratively resolve the contract with the Spanish consortium Fomento de Construcciones y Contratas (FCC), investigated for the payment of massive bribes in Panama.

According to its director Lau Cortés, the CSS legal team was instructed to begin the process, with all the consequences that this will entail.

The agreement between both parties allows the CSS to declare the contract administratively terminated when one or more of the grounds for termination occur, determined in article 113 of Law 22 of 2006, on Public Procurement. One of those is the breach of the agreed clauses.

The abandonment or suspension of work without prior authorization is also considered causal.

According to the contract, the CSS must notify the contractor for rectification within 30 days and if after that time it does not do so, the entity may claim the bond.

In fact, Lau Cortés considered that last week FCC requested to terminate the contract so that the CSS could not enforce the performance bond, of  $55 million.

Aida de Maduro, the representative of the National Council of Private Enterprise on the board of directors of the CSS, told La Prensa that the FCC has to comply with the contract; otherwise, the CSS should enforce the bond. “That is the solution we hope for. There is no other alternative, ”she said.

President Laurentino Cortizo described as "inconceivable" and "a mockery" that FCC speaks of millionaire debts by Panama when it is public that it is involved in anomalies.[bribery]



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UN warned of risks in, mired Martinelli Health City project


8 years construction boondoggle and counting

Posted 11/09/2020

The Ricardo Martinelli was by the United Nations Office for Project Services (Unops), about the great risk to public funds in the development of the pharaonic City of Health without a clear analysis or control of the investment and operating costs of the infrastructure represents a great risk for the use of public funds.

Martinelli’s satraps at the CSS (Social Security Fund) had promised that y the $534  million project, which mushroomed to over $800 million, including massive bribes, would be named after him.

The current administration is now involved in a  multi-million dollar tug of war with FCC, the  Spanish company that won the contract and distributed the payola.

Unops also warned about the changes in the contract - from turnkey to payments for the progress of the work -, and the inclusion of the equipment in the tender, since, in its opinion, a construction company is not a specialist in medical equipment management especially state-of-the-art technology.

In its evaluation, Unops told  CSS: "the current structure of the CSS is not prepared to manage a project of this magnitude and complexity."

The current CSS director, Enrique Lau Cortés, reported that the company Fomento de Construcciones y Contratas (FCC) filed a lawsuit before the International Arbitration Court against the CSS to demand $125 million for the work.

t the request of Panama, Unops analyzed the City of Health, in 2016 and highlighted a series of problems in the overpriced development.

and warned about critical points of the project, being built by FCC, which is being investigated for the payment of bribes in Panama and Spain.

8 years, still unfinished
The City of Health, which was awarded in 2012 for $554.3 million, will end up costing about $ 800 million. Currently, construction is 65% complete, although the works are paralyzed due to a legal conflict between the CSS and FCC.

“In this sense, Unops' experience in the management of hospital works contracts has not been the best when structural components are merged with the provision of equipment, while a construction firm is not a specialist in the management of medical equipment. and less if it is state-of-the-art technology ”, they noted.

The UN office found more deficiencies: The absence of an investment plan and a project charter. These documents, which are prepared in the initial phase of all works, are the ones that formalize, among other aspects, the objectives of the project, its financial viability, and governance.

Unops found that the CSS has a “rigid organization by departments” that, many times, operate as isolated compartments, something that for them plays against the work, since the management of a complex and multidisciplinary project in An environment that rigidly applies administrative rules represents a very important challenge, which can, by itself, but the project at risk.



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No one to blame for the multi-million boondoggle


Posted 12/09/2020

A report by the United Nations Office for Project Services, which analyzed the contract for the so-called City of Health in 2016, leaves no doubt how poorly conceived this work was, since its inception, which will end up costing hundreds of millions more than expected. And it is so, because its construction was the perfect excuse to strip policyholders of tens of millions of dollars. We must not forget that this work - along with the bribes - would be paid for by those who contribute money to this institution, which, as is known, has been dying for years. The United Nations study revealed deficiencies in the reforms that were made to the contract to benefit the company, to which must be added the problem that a construction company must also provide state-of-the-art medical equipment to a hospital complex. An internal report by the CSS found that there was no investment plan and that the supervision of the work was diluted between different departments of the CSS; It could even be considered that there was no established team to respond to the status and results of the project. Now many things have an explanation ... And still, no one takes the blame. -LA PRENSA, Sep.12




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City of Health a million dollar unfinished horror movie


Posted 19/10/2021

The City of Health, a flagship project of the Martinelli administration will end up costing over a billion dollars, more than double the original projection, after 11 years of delays, corruption probes, and court challenges.

Is estimated to be ready in 24 months. The contract was awarded in 2012, for $554.3 million.

The revelation came from the director of the Social Security Fund (CSS), Enrique Enrique Lau on Tuesday, October 19, at the headquarters of the Latin American and Caribbean Parliament, in a conference in which he offered financial details of the project that was originally in charge of Fomento de Construcciones y Contratas (FCC), currently investigated by the payment of bribes in Panama.

After years of delays, changes in the design and scope of the work, in addition to the contractor's claim for more money, FCC ended up leaving the work and withdrew an arbitration proceeding against Panama for differences over the contract.

In July of this year, the Cabinet Council authorized the CSS to sign with the Construcciones Hospitalarias consortium and the insurer Mapfre Panamá, SA “a transactional agreement” to complete the construction of the project.

Lau specified that the new agreement was sent to the Comptroller General to receive in August. There is a period of 90 days to perfect the details of the agreement, a period that expires in November. The projection is that the work will be delivered in 2023, eleven years after Martinelli

"The civil works at the moment looks like a scary movie," Lau said, referring to the state of the facilities built by FCC.

According to the financial program for the work, of the $ 554.2 million agreed in the contract with FCC, $ 338.7 million have been paid; there is a budget available of $ 215.5 million and additional funds of $ 445.5 million are needed, for a total of $ 999.8 million.

Later, during the presentation, Lau explained that in reality, the additional funds that are needed will amount to $486.6 million when the cost of financing is included, "so as not to hit the reserves of the Fund." That is to say, that the work, instead of ending up costing $999.8 million, as it had initially warned, will have a total cost of $1,040.8 million.

In addition to the cost of financing, the CSS has budgeted in the additional item for the City of Health, funds for medical and technological equipment and civil works.



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