Sakhiwo Health Solutions - August 2019

S A K H I W O H E A LT H S O LU T I O N S

SAKHIWO HEALTH SOLUTIONS

Sakhiwo to Develop SA’s

First Academic Hospital Since 1994 PRODUCTION: Karl Pietersen

Multi-skilled health consultancy business, Sakhiwo Health Solutions is the Pretoria-based healthcare infrastructure business that is truly making an impact on the ground in the fight to revitalise the country’s challenged healthcare and medical industry. Building hospitals, sourcing leading technology, designing and planning new clinics, training staff and much more, Sakhiwo is helping to make improvements for the better. Corporate Director, Johann Loubser talks to Enterprise Africa about exciting projects underway right now.

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South Africa is going through something of a healthcare crisis. There is a significantly growing population, characterised by young people – more than 35% of people are aged between 15 and 34. The economic climate remains uncertain with growth figures for 2019 and 2020 not expected to reach above 2%. Because of this, spending on improvements in the healthcare sector have been slow. This is leaving many without access to quality healthcare.

In a modern South Africa, this is unacceptable.

Chronic staff shortages, long wait times, equipment shortages, alarming oncology deficiencies, large negligence claims, lack of infrastructure and

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maintenance, and growing mental health related issues make for a bleak picture in state hospitals if not addressed with vigour. Private hospitals remain expensive and insurance schemes and medical aids only go so far. The need for investment is dire.

Enter Sakhiwo Health Solutions.

Founded in South Africa in 2006 by members of the clinical, build, professional and finance industries, the company’s work comes as a turnkey professional service provider and an implementing and multidisciplinary development agency for health facilities. Providing health planning, facility design, project management, technology procurement, health consultancy,

staff training, hospital infrastructure development, commissioning and facility maintenance management and sourcing finance, and much more is the type of work underway right now for this expert organisation.

Sakhiwo, in its relatively short life, has already built three complete hospitals and 25 substantial components for existing hospitals.

This is a business that is investing into South African healthcare and realising material results.

Johann Loubser tells Enterprise Africa about multi-billion Rand projects underway right now that will change the face of healthcare in Limpopo, firstly the new Limpopo Central Hospital which will start going up next year.

INDUSTRY FOCUS: INFRASTRUCTURE

LIMPOPO CENTRAL HOSPITAL “It’s an academic hospital and it will be built in Polokwane,” he says. “The total cost is around R4 billion and it includes a new hospital of 488 beds which will be linked to a new medical school, part of the University of Limpopo, which will be on its own site adjacent to the new hospital. It also includes the upgrade of the existing tertiary services of the Polokwane Hospital, so the total complex will be 624 beds available as an academic platform for the training of medical students through the Health Sciences Faculty of the University of Limpopo.”

The province, and the country, has been crying out for a new academic hospital – where medical personnel can be trained – having not opened one in 25 years.

“It will be the first newly built, complete academic hospital built in the country since democracy in 1994.

Limpopo currently does not have any platform for the training of medical practitioners so this will become the first hub for the province and will contribute towards the shortage of medical practitioners in the country. Currently, we send medical students to Cuba for training because we don’t have the facility and capacity available in South Africa,” says Loubser.

Sakhiwo will also plan all of the equipment and healthcare technology that goes in to the hospital. This process is normally started around six months prior to completion of the hospital and will normally continue for around three months after completion of the building.

// APART FROM BRINGING FACILITIES TO THESE AREAS, WE ARE ALSO CONTRIBUTING TO JOB CREATION IN REMOTE AREAS // 4 / www.enterprise-africa.net

“The budget was approved in October last year by the National Treasury. We are advanced with the design and health planning of the hospital to the extent where the designs will be completed by November and the tender will be published shortly afterwards. We are running the project as two separate contracts with the 488-bed new hospital separate from the upgrade of Polokwane Hospital, but both will go to tender around the same time. The construction period for the new hospital will be 60 months and we are planning for the building process to begin in March or April 2020, ending in around June 2024 when it will be completed and commissioned,” details Loubser.

SILOAM, VHEMBE In the north of the province, close to the Nzehelele nature reserve, the Siloam Hospital will receive major investment.

Announced as a Presidential Project some eight years ago, the project will add much-needed capacity for the area.

“Vhembe District is probably one of the most neglected areas of the country in terms of provision of sufficient hospital and healthcare services,” admits Loubser. “It is a Presidential project, announced by our previous President as one of the mega projects in 2011. It has taken a long time to get to where we are currently, but it will be a 230-bed hospital with upgrades to components of the existing hospital including the psychiatric ward and mortuary.

The total value is around R1.2 billion including construction and equipment.

The first phase, the psychiatric ward and mortuary, was out on tender and was recently concluded and accounts for around R40 million. It is vital to get underway with these upgrades to relieve current pressure on the hospital.

“The new component of 230 beds will be built on the existing site of the Siloam Hospital which is an old missionary hospital in a very dilapidated state. The existing hospital will remain operational for the duration

// IT IS A 530-BED HOSPITAL WITH A TOTAL COST OF R1.5 BILLION, CREATING A LOT OF JOB OPPORTUNITIES DURING CONSTRUCTION // of the construction period.”

The tender will go out in September and the duration of construction will be 48 months. Sakhiwo is responsible for planning and design of the hospital, procurement of equipment, and project management of construction and commissioning of the facility.

“When the hospital becomes operational, we will decant the patients from the old hospital into the new hospital and we will begin to plan part demolition of the old hospital and repurposing of old buildings on the site,” explains Loubser.

HEALTHY EASTERN CAPE Like Limpopo, the Eastern Cape has a need for new and updated hospital and health services, especially in more rural and remote locations. Sakhiwo is bringing its expertise to the Eastern Cape Province to provide a range of solutions that will boost the entire industry in the region.

“In the Eastern Cape, in Tabankulu, we are working on the Sipetu District Hospital. We are already onsite and we are well advanced with construction, anticipating completion towards the end of 2020 with commissioning in early 2021. This is also a very remote area with few services and while there is a hospital on the site, that we have kept open during construction, it is a dilapidated building which causes the provision of poor services,” says Loubser.

“Cecilia Makiwane Hospital is the most recent project that we have

INDUSTRY FOCUS: INFRASTRUCTURE

// IT WILL BE THE FIRST NEWLY BUILT, COMPLETE ACADEMIC HOSPITAL BUILT IN THE COUNTRY SINCE DEMOCRACY IN 1994 // handed over and we are still doing facility maintenance on the project. The hospital itself was actually commissioned in October 2017 and inaugurated by the then Vice-President Cyril Ramaphosa.

It is a 530-bed hospital with a total cost of R1.5 billion, creating a lot of job opportunities during construction. It was an existing old barrack-style hospital in a dilapidated state – the buildings had been condemned by the municipality some years ago. We support the facility for a period of two years.”

When completed, Cecilia Makiwane Hospital was the single biggest hospital built in the country since 1994, kitted out with world-leading technology and R360 million of new equipment and furniture, demonstrating Sakhiwo’s impact on health services in South Africa.

“Apart from bringing facilities to these areas, we are also contributing

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to job creation in remote areas. It’s challenging to build in these places and there is a lot of unemployment so there is a lot of focus on all of these projects to use local content, local labour and local SMME contractors. The target for all of these projects is to employ 30% local businesses, labour and content,” details Loubser.

Three hours north of Cecilia Makiwane, in Umtata, Sakhiwo is active at the Nelson Mandela Hospital, planning a new oncology unit. Currently, Umtata doesn’t have an oncology facility and patients are referred to East London’s Frere Hospital.

“There is a big need, and the turnaround to get an oncology department up and running is three to four years, so the sooner we can get the funding sorted and get started, the better,” says Loubser.

Sakhiwo is also responsible for the maintenance management of all the hospitals and other health facilities in the Province and runs a Call Centre and Maintenance Control Centre to cope with the huge demand for maintenance to buildings and mechanical and electrical installations.

Upgrades and refurbishment of numerous hospitals forms part of the implementation of this contract.

CONTINENTAL DEMAND Across Africa, access to quality healthcare remains an issue at the front of everyone’s mind. Research suggests that almost half of all deaths and about a third of disabilities in low and middleincome countries could be avoided if people had speedy access to emergency healthcare. Often, people are forced to make risky journeys over long distances to access hospitals that are outdated and understaffed.

Sakhiwo has recognised this need and is building relationships across the continent so that more and more quality hospitals and clinics can be developed.

“We have been involved in Namibia for a few years and we have been planning and designing new hospitals which are desperately needed but we are waiting for funding to be approved. We are involved in various stages of development and planning in Zimbabwe, we are working with the Avenues Clinic doing a new 100-bed women and children hospital with the private sector. We are involved with hospital development from the private sector in Botswana. We are involved in Ghana with some private sector hospitals and we are in discussions with the Ministry of Heath on public hospitals which will be done on a financed EPC

SAKHIWO HEALTH SOLUTIONS

basis. In Cameroon, we are busy with upgrades for Presbyterian Church’s hospitals. We are also building a new hospital there and we are engaged with the government about upgrading the existing public hospitals. In Kenya, we are busy with four private sector hospitals in a number of the provinces.

We are also looking at Uganda and Nigeria for further opportunities,” explains Loubser.

The company seeks local strategic partners in every country in which it operates and spreads work around various organisations in a drive to create employment.

“We want to leave a lasting impact and it’s not a matter of moving in and getting out,” says Loubser.

Usually, the most important professionals to find are electrical and mechanical engineers as this is a key factor to successful hospital infrastructure. Sakhiwo brings its own health planning and health technology planning and has a core team of architects and engineers that provides support and skills transfer where and when required.

“We like to establish a footprint with local consultants and we work with selected engineering firms and architects. We cannot always work with one single company. When working with government, we are obliged to spread work across various consultants.

In the Eastern Cape alone, we work with 66 local consulting firms that handle architecture, engineering and quantity surveying and they sub-contract to a number of local SMMEs and smaller black empowerment companies. The same goes for our work in the rest of Africa.

We contract a core team made up of architects and civil, structural, electrical and mechanical engineers and we ensure skills and opportunities are shared.”

While the demand across Africa is large, supply does not always match up and this is largely down to funding issues.

“The only thing that holds progress back is the availability of capital,” admits

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Siloam Hospital, Limpopo

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INDUSTRY FOCUS: INFRASTRUCTURE

left to right : Braam van der Hoven - Director, Hylton Schwenk - Manager Eastern Cape, Piet van Heerden - Director, Dr Gil Mahlati - Executive Chairperson, Johann Loubser - Corporate Director, Dr Tebogo Mphake - Chief Executive Officer, Vincent Sahanga - Director Africa Projects, Benjy Mokgothu - Operations Director

Loubser. “The needs exist - that is not debateable. It’s just about the capital being available. Unfortunately, with a public hospital it performs a purely social function and there is no revenue stream which in a public-private partnership is a requirement for the private partner to generate income. So, we rely on the ability of government to fund the project or repay a loan for the hospital, and hospitals by nature are very expensive.”

Fortunately, Sakhiwo is a full service, turnkey provider and can bring solutions from start to finish, addressing issues right the way through a project lifecycle. This is a unique ability and sets the company apart from others who can only provide solutions for single aspects during a development project.

“In Africa, the delivery platform is also a problem, and this is where Sakhiwo plays an important role,” explains Loubser. “We can go to the financial sector and show funders what we have done and what we can do. We explain that we do things as a one stop shop so there are no gaps in the delivery process. There are very few players on

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the continent who can work like this.

We are the only African-based company that can provide a comprehensive service on this basis. There are some European and North American players that are involved in delivering a turn-key solution, but they are mainly providers of equipment at their core.

“The problem in splitting the different functionalities is that there is no coordination and delivery then takes a lot longer than it should, so the real solution is to have a full turnkey with planning, design, construction and equipment provision,” he adds.

PRIVATE HOSPITALS While Sakhiwo’s work has historically been involved with state hospitals and healthcare facilities, the future will hold more of a focus on the private healthcare industry. Loubser is keen to develop infrastructure that is cheaper to build, without compromising on service quality, for those in more remote regions.

“Alongside African Financial Group, we have formed a new company called African Clinical Holdings, a subsidiary of Sakhiwo, and we have the licences

to 15 new licenses, some of which we have acquired ourselves and some which we have acquired from other entities. We are creating a platform for the development of independent new hospitals outside of the main groups in South Africa. We are coming with a new concept of hospital which is more budget-friendly where we decrease the cost of construction but still deliver a service which is equivalent to any private hospital and bringing that closer to the more rural communities and periurban areas in the country,” he says.

“We hope to cater for medical aid members that are on low cost options and the section of the population that is employed but un-insured. The escalating cost of private healthcare has constrained access even for medical aid members, as they run out of benefits early in the year. Our focus will be on what we call the ‘half insured’ or the ‘employed but un-insured’. There are around 15 million people in this category in the country. We believe that we should be able to bring sustainable and cost-effective private healthcare to the market through more

SAKHIWO HEALTH SOLUTIONS

innovative reimbursement methods and healthcare delivery models and through collaborative relationships with medical aid schemes and medical professionals.

It’s a whole new drive into the private health sector in South Africa.

“We also believe that this new concept of budget hospitals with a clear identity and recognised level of service, will fit in well with the planned National Health Insurance (NHI) in the country, also in terms of accessibility in terms of where they are located.”

One of the key problems for new private hospital developments, is that financial institutions cannot always realise security. “A hospital is a dedicated building and there is no real security in the bricks and mortar,” says Loubser.

“The security sits in the operations and management and, outside of the few large hospital groups, there is no real company that can manage hospitals for independent operators on a large scale. Because there is no strong management, financial institutions are not always willing to fund them, despite seeing the necessity of them.

This is why we have started Sakhiwo Hospital Management to provide those core management skills that allow operations to realise the returns and service their debts to the financial institutions.”

This novel and innovative approach to development in the industry is proof that Sakhiwo is committed to the ongoing, sustainable upliftment of the entire healthcare sector. The company holds the vision of being an ‘outstanding leader in health

infrastructure development, while meeting the needs of the client and the community’. Considering the state of healthcare across South Africa, and the wider SADC region, Sakhiwo’s efforts are already demonstrating that this vision is being achieved. The company has major growth opportunities ahead, and with a significant project portfolio lined up for the future, now is a promising time for this expert organisation.

“We are very bullish,” states Loubser.

“We realise that now is the time to look at economising in terms of building methods and structures. It is a time for us to move more aggressively in the market. We are fortunate because we have this pipeline of projects - our pipeline of hospital projects currently is in excess of R10 billion.”

FACILITY AND EQUIPMENT MAINTENANCE One major area of neglect in public sector hospitals is the maintenance of hospital facilities and the mechanical and electrical installations as well as the maintenance of bio-medical equipment and health technology. The structure and management to maintain hospital infrastructure and bio-medical equipment, is very extensive and requires a high level of skills. Especially on the bio-medical side there is an acute shortage of bio-medical engineers and technicians in South Africa and the rest of the continent.

Sakhiwo has been contracted for a total of seven years to do maintenance management for two Provinces in South Africa which covered in excess

of 150 hospitals and other health care facilities and over 1000 clinics. The management structure consists of a Maintenance Control Centre with a 24/7 call centre and an inspectorate that manage reactive and scheduled maintenance with the assistance of a computerised maintenance management system with an active asset register that allows for proper life-cycle management of the assets.

Sakhiwo has recently formed a joint venture company with VAMED Services and Management GmbH, based in Austria and one of the largest companies in Europe that provides bio-medical services and maintenance.

VAMED Healthcare Services SA will be providing extensive bio-medical maintenance management and support services, including first line maintenance through a structure of maintenance hubs in South Africa.

This service will also be extended to the private hospital sector and other countries in Southern Africa.

Sakhiwo is a problem-solving business. The word itself is a Nguni (Zulu and Xhosa) word meaning ‘to be in the process of building’ – not only building structures but also building relationships. “Our motto is ‘let’s build health’ and it ties into our meaning as Sakhiwo,” Loubser concludes.

Where investment and expertise are really needed, Sakhiwo is stepping up.

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