UN warned of risks in, mired Martinelli Health City project

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.