PERH TO HAVE NEW PSYCHIATRIC CLINIC CONSTRUCTED AND WILL RENT IT
PERH to Have New Psychiatric Clinic Built and Lease It
The North Estonia Medical Centre (PERH) has announced a public procurement to find a developer for a new psychiatric clinic. The developer's task is to construct the clinic building and then lease it to PERH.
PERH announced the public procurement this week to find a so-called concessionaire who will build a new psychiatric clinic building on the property at Sütiste tee 21 in Tallinn and lease it to the regional hospital.
This is a new and different attempt to find a builder for the new clinic building. Previously, PERH had unsuccessfully tried to find a builder for the psychiatric clinic through traditional construction tenders on three occasions. Last autumn, PERH told ERR that after three failed construction tenders, the plan for a new psychiatric clinic had been put on hold, no construction funds had been allocated in the state budget, and there were no external funds available.
Now, a new scheme has been devised, and instead of looking for a builder for the new building, they are seeking a developer who will organize the construction of the hospital building and then lease it to PERH.
"The significant difference from a standard construction work procurement contract is that the developer is not paid separately for carrying out the construction work, but rather is compensated for the use of the building," said Agris Peedu, Chairman of the Board of PERH.
The estimated value of the contract in the tender is €130 million. This amount includes both the cost of constructing the building and 20 years of lease payments.
Three and a half years ago, PERH announced a public procurement for the construction of a psychiatric clinic on the grounds of PERH's Mustamäe hospital campus in Tallinn. The tender failed because no bids were submitted, and in October 2022, PERH announced a second tender. While the first tender planned for the clinic to be completed by 2023, the deadline for the second tender was 2026, by which time the psychiatric clinic currently operating on the territory of the former Seewald summer manor on Paldiski maantee was to move into the new clinic. This tender also failed, as did the third construction tender last year.
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If the new tender is successful, the psychiatric clinic will move into the new building in 2028.
Thus, there is still a three-year waiting period for the move, while the condition of Seewald's buildings is already very poor. According to PERH, the over-100-year-old Seewald buildings and infrastructure are completely amortized and in critical condition.
Peedu expressed hope that this tender would be successful, as companies have already shown interest in the construction.
One of the reasons why previous tenders failed was the excessively high price of the bids. For example, in the last tender, PERH expected the building to be constructed for €65 million (plus VAT), but all bids significantly exceeded this amount.
Maarjo Mändmaa, Chancellor of the Ministry of Social Affairs, told ERR last autumn that the construction of a modern psychiatric clinic would rather entail an investment of €100 million, but the plan to build a new building has certainly not been abandoned.
"The conditions in Seewald are a real madhouse in a bad way – they cannot withstand any criticism," Mändmaa stated.
PERH's psychiatric clinic is the largest healthcare institution providing psychiatric care in Estonia, accounting for nearly 40 percent of all psychiatric treatment in the country. The clinic consists of an inpatient department with eight subdivisions and a psychiatric outpatient clinic. The clinic provides outpatient, day hospital, and inpatient psychiatric care to residents of all regions of Estonia.
According to the project, the new psychiatric clinic should consist of three parts: a one-story acute care building, a three-story outpatient department building, and a six-story main building for ward sections.
