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Hospital PPPs State of Mexico IFC Transaction Experience. The Location: Estado de México. One of 32 states in Mexico Population 14.4 million. The Client: ISSEMyM. IFC Mandate.

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the location estado de m xico
The Location: Estado de México
  • One of 32 states in Mexico
  • Population 14.4 million
The Client: ISSEMyM

IFC Mandate

Initially IFC was hired to implement PPPs for a newly-opened oncology center and for construction/operation of a new tertiary hospital

IFC analysis showed

Oncology center could be optimized by contracting w/ other insurers for utilization, without need for a PPP

No need for proposed tertiary hospital

Need for two new 120-bed secondary hospitals – via PPPs

  • State social security agency for state employees
  • Health insurance and services for approx 900,000 people (employees + families)
  • Network of 82 primary care centers, 10 secondary hospitals, 4 tertiary hospitals
ppp transactions
PPP Transactions


  • New 120 bed regional secondary hospitals in Toluca and Tlalnepantla
  • Estimated investment of $48 million (Toluca) and $57 million (Tlalne)


  • Operator is responsible for design, construction, financing, equipping, facility management, non-clinical services, and selected clinical services (dialysis, labs, imaging) under a 25 year contract
  • The public sector will be responsible for hospital management & other clinical services
  • The private sector operator will receive a fixed payment and a variable payment related to performance
  • PPP operator assumes risk for:
    • Cost of consumables
    • Replacement of medical equipment
  • Sequential bids for Toluca (Sept/10) and Tlalnepantla (Oct/10)
  • Three-step bidding evaluation

Must exceed thresholds Pass/fail vis-à-vis Lowest wins functional specs

  • Toluca bid:
    • 3 bidders (all passed)
    • Prodelmex won
  • Tlalnepantla
    • 4 bidders (3 passed)
    • Marhnos won

Concept Design

Financial Bid (PPP payment)

Technical & Financial Criteria

implementation issues
Implementation Issues

State’s PPP law requires EACH project to be approved by State Legislature.

12-month delay in submitting to Legislature

Tlalnepantla location hampered by limited space and existence of clinic & communications tower

Design changes & obligation to include new clinic

Bidders reluctant to take consumables & equipment replacement risk

Risk transferred but mitigated with caps

ifc s value added
Project Selection & Justification

Investor Confidence

IFC’s Value Added

IFC’s presence

  • enhanced bidding competition
  • gave confidence to operators

re: bankability/ sustainability

  • Recommended different projects
  • Sizing to meet client needs &

fiscal limits

  • Reports to State Legislature

Bidding Procedures

  • Simplified bid criteria &


  • Recommended max price

to client