Minister of Health Álfheidur Ingadóttir and chairman of the Icelandic Pension Funds Association (IPFA) Arnar Sigurmundsson signed a declaration of intent yesterday on constructing a new Landspítali hospital in Reykjavík.
Landspítali is the white building in the front of the picture. Copyright: Icelandic Photo Agency.
“It is a happy day,” commented Minister of Finance Steingrímur J. Sigfússon. Other ministers agreed. Prime Minister Jóhanna Sigurdardóttir said the signing marked a new beginning, according to Morgunbladid.
Representatives of 20 pension funds signed the declaration along with the health minister. However, the declaration is not a guarantee that the pension funds will finance the project. Financial participation on their behalf depends on the project’s profitability and possible risks.
A real estate company, possibly more than one, will be founded. Then a tender offer for the construction must be made in the European Economic Area (EEA).
The pension funds expect to make an agreement with the real estate company on funding and the state, which would be the buyer of the project, would then secure the remaining funding through an agreement between the real estate company and the Ministry of Health.
Operations are scheduled to begin in 2011 and end in 2016. The total cost of the construction is estimated at ISK 33 billion (USD 264 million, EUR 165 million).
ISK 7 billion (USD 56 million, EUR 35 million) will be needed for new equipment and ISK 11 billion (USD 88 million, EUR 55 million) for reconstructing older hospital buildings.
After a 40-year leasing period, Landspítali would come into possession of the new building. It will be 66,000 square meters in size and facilitate 180 beds in private rooms and a patient hotel with 80 rooms.
The estimated labor demand in the construction period is 2,644 man-years.
Click here to read more about the new hospital.