The São Paulo state government plans to procure five hospitals as PPPs before the end of the year, State Secretary of Health Giovanni Guido Cerri has announced.

However, with the plans still in the initial stages, the state government has only identified three of the hospitals – regional hospitals in the cities of Sorocaba and São José dos Campos and a new building or the Pérola Byington Hospital in the neighborhood of Bom Retiro in the state capital.

Municipal Healthcare PPP Put on Hold

The announcement by the state government came just days after the accountability office for the city of São Paulo, TCMSP, indefinitely postponed a BRL1.37bn (USD669m) healthcare PPP in the capital.

Proposals were due on May 16. However, TCMSP interrupted the process because the concession agreement would not be signed until after the Oct. 7 municipal elections. TCMSP also said the feasibility studies conducted in 2010 were out of date.

No Effect on the State

TCMSP has different criteria and different rules than the state’s accountability office, so the deferral of the city’s healthcare PPP will not likely have much effect on the state’s plans, said Leticia Queiroz de Andrade, head of the infrastructure practice at local law firm Siquiera Castro Advogados.

“TCMSP’s analysis was very specific to that project. The studies were indeed outdated, but if the state avoids the same mistake, there should be no problems,” she said.

TCMSP also objected to the city using a financial study conducted by a bank at the request of a developer interested in the project.

“This is acceptable to the federal accountability office, TCU, and possibly even to the state office, but it was not acceptable at the municipal level. This practice is becoming very common. The recent airport concessions all followed the same procedure, and since the healthcare PPP planned by the state will go through a different accountability office, it should not pose any problems,” Andrade said.

“It will all depend on how financial attractive the project will be,” she said.