Saudi G Hospital

Environmental & Social Review Summary

This Environmental and Social Review Summary is prepared and distributed in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Board dates are estimates only.
Any documentation which is attached to this Environmental and Social Review Summary has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content.

Project number	25341
Country	MENA Region
Sector	Health Care
Department	Health and Education
Company name	Bait Al Batterjee Medical Co.
Environmental category	B
Status	Completed

Date ESRS disclosed	November 1, 2006

Previous Events	Approved: January 3, 2007

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Overview

Category & Applicable Standards

Key Issues & Mitigation

Community Engagements

Client's Documentation

Overview of IFC's scope of review

IFC’s review of this project consisted of appraising a wide variety of technical, environmental, health and safety, labor, community and social information provided by the Saudi German Hospital Group (SGH). Discussions were held with corporate staff namely the Directors of Quality, Health and Safety, Human Resources, and Building Maintenance. In addition meetings were held with representatives of SGH’s Construction Division and their in-house architects – responsible for the design and construction of all the Group’s facilities. The IFC team also visited the site of the Cairo hospital where construction activities were just starting (i.e. basement concrete was being poured).

Project description

Saudi German Hospitals Group (SGH) is considered the largest private sector healthcare provider in the Middle East. SGH began its operations in Saudi Arabia in 1988 with a 300 bed general hospital in Jeddah. SGH is now operating 3 more hospitals in Saudi Arabia – in Aseer (400 bed with startup in 2000), in Riyadh (300 bed with startup in 2001) and in Madinah (300 bed with startup in 2003). SGH’s long term plans are to establish 30 world class hospitals in the Middle East region by 2015. SGH is a family owned company with the family members who are doctors and engineers being the majority owners.

The IFC financing will allow SGH to expand their high quality medical services to Sana’a, Yemen and to Cairo, Egypt. SGH has recently built and opened a 300 bed state of the art hospital in Yemen’s capital, Sana’a (total capital cost $100 million) and are proposing to build and operate a similar 300 bed hospital in Cairo (estimated capital cost $75 million). It is proposed that the Cairo hospital will be opened in the second quarter of 2009. SGH hospital buildings, medical facilities, equipment, medical care and support have been established to meet international standards. There is a close working relationship with German architects in the design and construction of the Group’s hospital. Also many doctors from Germany, other EU countries, the US, and from the Middle East region provide medical services and support to SGH facilities. SGH has an in-house design and construction group which develops and implements all their projects – this allows learning from each project thus continually improving both the design and construction of SGH’s facilities. In addition to the facilities listed above, SGH is building and will operate a 4,000 student Medical College in Jeddah and is also building and will operate a 300 bed hospital in Dubai (to be opened in 2008). SGH has a number of other healthcare related projects in the region (e.g. Saudi Arabia and Pakistan). IFC’s proposed investment will be Sharia’a compatible (Islamic finance), the first such IFC investment in the real sector.

Key environmental and social issues and mitigation

The client has presented plans to address any impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements of Egypt and Yemen as well as IFC environment and social policies and the environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the projects is summarized in the paragraphs that follow.

SGH has a clearly defined corporate vision and mission statement as well as policies and operational procedures in all key areas. Given the size and scope of SGH’s operations in the Middle East region, the Group has developed a very strong and effective management team. This includes a corporate quality management team and systems that implement programs at all SGH’s facilities. This has resulted in excellent EHS performance throughout the Group. The President/CEO of the Group reports to the Board and has a corporate office that provides a staff function to the operating hospitals. Each hospital/major facility in the Group has a Chief Operating Officer (COO) with a Chief for Medical Operations and a Chief for Administration. Each hospital has a Steering Committee (SC) chaired by the COO and with each medical service (e.g. X ray, lab services) and each administration department (e.g. marketing, maintenance, catering, finance) head as a member. Each hospital also has a Medical Department Committee (MDC) chaired by the Chief of Medical Operations. At each hospital the SC and the MDC meet very regularly and are linked by videoconference to the Group President who chairs this meeting. Minutes for each meeting are posted online for access by anyone in the Group and action items are coded for follow-up.

In addition to the committees detailed above, each hospital has a Quality Assurance and Safety Committee that also meets on a regular basis. The idea is facilitate the sharing of best practice, review performance and learn within the Group. As noted above this has allowed for strong and effective management and leadership resulting in excellent performance and a commitment to quality. Finally each hospital has it’s own strategic goals, key performance areas and performance indicators which are monitored and reported on regularly.

The new hospital in Sana’a was a greenfield development in an urban setting and is located on land zoned for this type of use. In Yemen the hospital was permitted by both the Sana’a city authorities and the central Ministry of Health. In Cairo the new hospital will also be built on vacant land in an urban setting near the airport that has been zoned for this type of development
– a large shopping centre is planned for development next to the hospital. As is the case in Yemen, both the Cairo municipal authorities (for such issues as zoning, fire protection, water supply, wastewater treatment, solid waste disposal, supply of electricity, and transportation) provide the necessary permits to the project and the central Ministry of Health also provide the required approvals. The key approvals in both cases from an EHS standpoint are the municipal/city permits and these have all been obtained for both projects. Generally these types of medical facilities (300 bed hospitals) pose only a very limited impact on the environment and the neighboring communities provided they are operated to international standards. Once the hospital is completed, the Ministry of Health inspects the facilities before giving the final approval to open.

When SGH opens a new hospital, a team of staff from the corporate office and selected other hospitals help to implement the new organizational structure and procedures consistent with SGH’s policies. SGH has achieved ISO 9001:2000 (Quality) certification from an international certifier (TUV of Germany). Education and training are one of the core values of SGH. Internal and external training is provided on a regular basis for all medical staff. This training is provided by in-house experts, medical consultants (frequently from Germany), other experts as well as through conferences and workshops.

SGH has a well known code of patient’s rights and responsibilities. There is a very strong and well organized grievance procedure for both inpatients and out patients, with an open door policy. The basic rule of the SGH Group is “money back if not fully satisfied”. These programs are handled by SGH’s QA Department.

Based on the requirements of the local permitting process, it is anticipated that this project will comply with both host country government’s requirements (Yemen and Egypt) as well as the IFC EHS requirements.

Current employment in the Group is about 5,000 staff including the new hospital in Sana’a as well as the Group’s design and construction subsidiaries. Staffing for the hospitals is about 4 to 5 employees per bed – thus the new Cairo hospital will have a full staff compliment of about 1,215 with 225 doctors, 390 nurses, 150 technicians, and 450 administrative/support staff. One of the major issues facing SGH relates to the hiring, training and retaining of high quality staff from the medical sector (e.g. doctors, nurses, laboratory technicians). SGH is currently building a 4,000 student full service Medical College in Jeddah, the first private Medical College in the Middle East. This institution will be accredited in Germany and will provide trained medical staff for the Middle East region and of course to SGH. The Medical College will train not only doctors and dentists but also nurses and technicians.

SGH’s Human Resource policies and procedures are very detailed and all SGH facilities are required to comply with these policies and procedures and their performance in this regard is monitored very carefully. All SGH employees from doctors to construction workers have employment contracts which are renegotiated every 3 years on average. All workers are paid monthly and there are bonuses and performance incentives which are normally paid quarterly. Market surveys etc are used to determine salary levels as there are no unions or collective bargaining agreements. Salaries and benefits in SGH are excellent by the standards in the Middle East. As is often normal in the Middle East, SGH provides furnished housing for their staff – normally apartments whose size varies depending on the person’s seniority in SGH. Construction workers are provided on-site housing, mess, religious and recreational facilities as well as round trip tickets home at no cost and 30 days annual paid vacation.

SGH complies with the labor laws of the country in which they are operating. Their policies and procedures are open and transparent and SGH advertises itself as an equally opportunity employer. The Group currently employs 29 different nationalities, of all religions, and their working language is English.

SGH has a fully developed and operational grievance procedure. While employees are encouraged to talk to management about any problems there is a formal grievance procedure where employees put their issues in writing. Again as for hiring, these HR processes (e.g. discipline, grievances) are very transparent. SGH prides itself on being an excellent place to work.

SGH has a corporate occupational health and safety (OHS) policy as well as detailed procedures in place. Each Group facility has a trained OHS officer responsible for these issues as well as staff training. Each department in each facility has a nominated OHS representative who supports the OHS Officer. The OHS representative also in trained (internal and external training). An annual schedule of staff OHS training is prepared and implemented. All accidents must be reported in writing and initially investigations completed within 24 hours by the OHS Officer. All SGH buildings have the required smoke and fire detection equipment with either fire extinguishers or, in the larger facilities, sprinklers and hose and reel fire fighting systems. Building designs also allow for proper egress in emergency situations. These requirements are consistent with IFC’s Life and Fire Safety Guidelines.

Raw water to the existing hospital in Sana’a and the new hospital in Cairo is provided by the Municipality with SGH then providing necessary additional water treatment prior to distribution to the medical facilities. Wastewater is segregated at both hospitals with grey water (basically washwater) treated and then used for onsite irrigation. Blackwater is discharged to city’s industrial wastewater sewer for treatment prior to discharge to the environment. In Cairo there is a new municipal wastewater treatment plant near the airport whereas in Sana’a a municipal wastewater treatment plant is being built. SGH has very detailed procedures for handling all types of wastes. Red bag waste is collected by SGH staff and stored onsite. In both Cairo and Sana’a licensed contractors collect this red bag waste every day for transport to a Government licensed incinerator for disposal (i.e. in Cairo it is disposed of in the University of Cairo medical waste incinerator). In addition laboratory and radiological wastes are also collected regularly by Government licensed contractors for proper treatment and disposal. Garbage is also collected every day by a licensed contractor and taken to a licensed landfill for disposal. In Cairo natural gas is used in the boilers whereas in Sana’a the boilers are fired with either diesel or fuel oil. SGH wishes to be as resource efficient as possible and their hospital designs and operation tend to be as energy and water efficiency as possible.

In the case of emergencies the SGH hospitals will be expected to respond – hospital staff have been appropriately trained and SGH has detailed operational procedures in place for emergency preparedness and response and these will be implemented as each new hospital opens. Emergency drills will be completed and these drills will be coordinated with the local civil defense, fire and police authorities – in fact these authorities will actively participate in these drills. In Cairo security will be contracted to a local experienced security company – security guards will be trained and not armed. Similarly in Sana’a SGH will retain an experienced security contractor to provide both internal and external guards who will all be trained. As is required in Sana’a the guards external to the hospital will be armed but the internal security guards will not be armed. This approach is consistent with Government of Yemen policies and procedures and SGH will closely monitor the performance of their security contractor. Men in Yemen are normally armed at least with the traditional knife (dagger) – patients and guests entering the hospital in Sana’a will be asked to surrender their weapons by the security guards – again this is normal procedure in Yemen.

SGH has purchased the necessary land for the Sana’a and Cairo hospitals in urban areas near the airport (in both case) at fair market value. In Sana’a the vacant land was purchased from Yemen Airways and in Cairo the vacant land was purchased from an Egyptian industrial enterprise, Olympic Group. In Cairo, Olympic Group is planning to build a high end shopping center next to the SGH hospital. Both sites are well situated and traffic flow in the immediate area of the hospitals is excellent. There is a well functioning market for the selling and purchase of real estate in both Sana’a and Cairo. The process is open and transparent. There are no economically or physically displaced persons or resettlement of any sort from the purchase of land.

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