December 21, 2023

Colombia Will Have a Second Hospital Contracted Through Public-Private Partnership

Bidding Process for Gran Parque Hospitalario de Engativa in Bogotá Has Started
Holland & Knight Alert
Edwin Cortes | Maria Alejandra Gomez | Daniela María Arbeláez

The District Health Secretariat (Secretaría Distrital de Salud) and the District Health Financial Fund (Fondo Financiero Distrital de Salud) of Bogotá, D.C., are in the process of contracting, through a public-private partnership (P3), the construction, provision of equipment, operation, maintenance and reversion of the Great Hospital Park of Engativá (Gran Parque Hospitalario de Engativá). This will be the second hospital in Colombia to be awarded under this modality, after the successful case of the Bosa Hospital.

The project considers the design, financing and performance of the construction work; acquisition, installation and commissioning of hospital elements; performance of the operation and maintenance activities on the work; and the reversion of the construction to the district. The duration of the project is 10.5 years, including the reversion stage, and it has a budget of US$229,977,592.

The project retribution will be paid on a semiannual basis and will be structured through three functional units. The image below shows the architectural distribution of the functional units, with the activities contemplated in each of the stages.

Colombia Will Have a Second Hospital Contracted Through Public-Private Partnership

View larger image

The qualifying minimum requirements applicable to this selection process are detailed below.

Legal Capacity

The following may participate in this bidding process and submit offers:

  • natural and/or legal persons under private law
  • mixed economy companies and their subsidiaries
  • domiciliary public utilities companies
  • industrial and commercial companies of the state or their assimilated entities, whether national or foreign

All of the above can participate individually or under plural structures.

The bidder shall have the legal capacity to submit the bid, execute and perform the contract, not be subject to any cause of inability, incompatibility or conflict of interest provided for in the law, and not be reported in the Bulletin of Fiscal Responsibilities (Boletin de Responsables Fiscales). In addition, the bidder shall declare that it is not undergoing a reorganization proceeding, nor is subject to any of the grounds for liquidation.

Legal capacity is evidenced as follows:

  • Natural Persons: Colombian ID, foreigner’s ID or passport
  • National or Foreign Legal Entities Domiciled in Colombia: Certificate of existence and legal representation issued within 30 days prior to closing, stating the powers of the legal representative, the corporate purpose, the incorporation of the company and the legal status of the company.
  • Foreign Legal Entity Not Domiciled in Colombia: Document proving the existence and legal representation of the foreign company, with basic information of the company (e.g., corporate name, purpose, representatives and their powers, among others). The document shall be dated fewer than four months prior to the closing date of this bidding process.
  • Plural Structures: It is mandatory for bidders to provide the document of constitution of the plural structure for the joint presentation of the offer and, in case of being awarded, the constitution of a company whose scope shall be the execution and performance of the contract. This requirement shall be evidenced with the private document, and duly authenticated, in which the plural structure is constituted. Likewise, each member of the plural structure must prove the existence and legal representation requirements individually.

Investment Experience

Tenderers shall accredit the investment experience through the accreditation of financing using the following options:

  • Option 1: This option consists of one construction project whose financing value has been at least US$87,377,662. In plural structures, the financing shall be credited by the “leader” of the project.
  • Option 2: This option consists of up to four construction projects with a simple aggregate financing value of at least US$109,249,300. At least one of the financings agreements shall have been for a value of at least US$65,549,580.

Financial Capacity

  • Net Worth: The offeror must have a minimum net worth of US$20,393,202. In plural structures, the net worth of the members may be added to prove the minimum net worth required. The “leader” of the plural structure shall have a minimum net worth of US$10,400,533.
  • Debt Ratio: A debt ratio of 90 percent is required if the bidder is a financial institution. If the bidder is not a financial institution, the debt ratio shall be 85 percent.
  • Specific Credit Quota: There shall be a certification of approval of a specific credit quota of a minimum of US$4,369,972. It can be credited by the individual bidder or the member of the plural structure. In the plural structure’s case, the bidder can provide two specific credit quotas.

The bidder, or its members, may accredit the qualifying requirements related to financial capacity and/or investment experience directly or indirectly with 1) its parent companies, 2) its controlled companies or 3) the companies controlled by its parent companies.

The bidder or the members of a plural structure shall prove the situation of control by stock ownership.

The private equity funds may support the participation of the offerors in the bidding process by means of an irrevocable investment commitment. The bidder or the member of a plural structure shall have one or several irrevocable investment commitment for a minimum of US$4,369,972. This irrevocable investment commitment shall be to credit and support the financial capacity. The private equity funds can also help to credit the investment experience of the bidder.

Technical Capacity

Bidders shall prove their experience in construction through the accreditation of the construction of at least two hospital infrastructure projects whose simple sum of built area has been at least 30,000 square meters. At least one of the construction projects shall be for a minimum of 16,000 square meters, built in the last 15 years.

The District Health Secretariat and the District Health Financial Fund of Bogota expect to award this selection process by April 5, 2024.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.

Related Insights