By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian taxpayers will seemingly have to shoulder 96 percent of the second New Providence hospital's $2.2bn-plus revenue needs via Public Hospitals Authority (PHA) subsidies over a 30-year period.

A March 2035 "feasibility study report" on the proposed Perpall Tract healthcare facility, filed with the Department of Physical Planning as part of the Ministry of Health and Wellness's application for preliminary site plan approval for the project, revealed that just $84m of the projected $2.28bn in required revenue is currently projected to come from charging patients for care received.

The remaining 96 percent, or almost $2.2bn required to cover the new 34,000 square metre hospital's operating and maintenance costs for 30 years from 2027, is shown as coming from the PHA in "financial support income". The report said it "assumes that the project's annual operating losses are subsidised by the PHA" - the same taxpayer-funded model used to sustain Princess Margaret Hospital (PMH).

Dr Michael Darville, responding to Tribune Business inquiries, yesterday said he would have to look into the matter when asked about the report's contents. However, Dr Duane Sands, the Opposition's chairman and a former health minister himself, suggested that the financing demands imposed by the new hospital "means taxation" - new and/or raised taxes to meet this "significant increase".

The "feasibility study", affirming that its calculations were based on a 30-year operational period, with construction set to take an initial three years, estimated that the new hospital's operational costs will total $2.048bn over these three decades. This averages around $68.651m per year and has to be financed via a combination of patient payments for the treatments they receive plus PHA subsidies.

Some 61 percent, or almost two-thirds, of these annual operating costs are accounted for by the forecast $42.005m annual wage bill for the new hospital's 650 staff - an annual average salary of $64,623. And seemingly adding in the total $285.25m construction cost takes the "total cost expenditure" for the new hospital to $2.283bn, or a $75.367m annual average spread over 30 years.

The Government has yet to explicitly state how New Providence's second hospital will be funded but, based on the "feasibility study", it appears the financing burden will largely fall on Bahamian taxpayers. The report acknowledged that this has long been the Bahamian public healthcare funding model, with minimal effort having been made to bill and collect patient user fees - even to those, such as civil servants, who have insurance or can otherwise afford to pay.

It noted that PMH, Grand Bahama Health Services (the Rand Memorial hospital) and Sandilands Rehabilitation Centre combined generated just $9.864m and $10.158m in operating income for 2016 and 2017, respectively. This, in turn, covered just 4.6 percent and 4.5 percent of the PHA's total operating expenses of $215.02m and $227.499m respectively for those two years.

These percentages align with the projections for the second New Providence hospital. "This report assumes that the project's annual losses are subsidised by the PHA," the study said of the proposed Perpall Tract facility, no alternative funding model having been suggested by the Government.

"During the [30-year] calculation period, the total revenue of the Bahamian hospital is approximately $2.283bn, including $83.99m in operating revenue and $2.199bn in financial support income from the Public Hospitals Authority excluding principal and interest repayments." This appears to suggest that the $195m China Export-Import Bank construction loan will be accounted for elsewhere in the Budget.

A significant increase in taxpayer-generated subsidies provided via the PHA, amounting to around $68m-$75m per year, will thus be needed to sustain New Providence's second hospital in addition to the $247.856m provided to cover PMH, the Rand and Sandilands in the 2025-2026 Budget.

"I guess they anticipate that they will lay the legislative framework and come later on and apply the screws to the public," Dr Sands told Tribune Business of the report's projections. "They're not going to be upfront about how they plan to sustainably fund this thing."

Others will argue that providing access to quality healthcare and potentially life-saving treatments is worth paying any price for. However, the Opposition's chairman asserted that the Davis administration has been less than forthcoming about how it plans to pay for the second New Providence hospital.

"They cannot meet their commitments now," he argued, "so I don't know how they expect to meet this new commitment as well, given what needs to be done to bring the PMH and the Rand up to speed. You cannot look at this in isolation. If this is a $300m project, what is the value of the upgrade for the flagship hospital [PMH] since this is not going to replace that."

Pointing to the Rand's $200m improvements, Dr Sands suggested that the combined cost of the planned upgrades for Grand Bahama, the PMH and the new hospital could approach between $750m to $1bn. And this figure did not include the needs of Family Island healthcare facilities, such as the mini-hospitals in Abaco and Exuma.

"This is magical thinking," Dr Sands argued, "and clearly the numbers suggest they [the Government] realise that the funds are simply not there and that there will have to be an additional revenue stream that they are not prepared to say to the public.

"Clearly, if they are going to meet the financial obligations they are signing on to without defaulting with the lender, then there's going to have to be a significant increase in funding and that means taxes. That's all I can say."

Colin Higgs, the Ministry of Health and Wellness' permanent secretary, in an August 29, 2025, letter to the Department of Physical Planning that accompanied the application for "land use approval in principle" wrote that the 50-plus acre site, located west of Ardastra Gardens and north of Greater Chippingham, featured largely forest and green land.

"The Bahamas hospital project aims to establish a state-of-the-art healthcare facility to meet the growing demand for high-quality services in the region," Mr Higgs wrote. "The facility will serve as a pivotal healthcare centre, providing comprehensive medical services to residents and visitors alike. The project site is strategically located near major roadways to ensure easy access for patients, staff and providers.

"The Bahamas Hospital will provide a new 200-bed hospital near Perpall Tract in New Providence. The hospital will be a specialty maternal and child hospital and will provide a variety of medical services including out-patient and emergency services. Provisions for administrative offices, auxiliary rooms and medical technology facilities will also be put in place.

"The project will span over a land area of 50.03 acres (202,464 square metres) with green space and some 500 parking spaces, and the building area will occupy some 365,972 square feet (34,000 square metres) offering acute tertiary level care services for women and children, vital to the healthcare facility inventory for The Bahamas," Mr Higgs added.

"The design of the hospital will feature eco-friendly, energy-saving and modern facilities that will be integrated into the existing healthcare services of the country with a potential for regional involvement." Mr Higgs wrote that a traffic impact assessment on the second New Providence hospital is now being conducted by the Ministry of Works and Family Island Affairs to coincide with the re-opening of school.

"Upon receipt of full-scale design drawings for the project, duly signed off by the end users and the local technical team of the contractor, the Ministry of Health and Wellness will immediately submit to the Department of Physical Planning and Building Control Division for further processing," Mr Higgs added. Environmental approvals have already been obtained.