Madrid court freezes Hospital privatisation

 

The Madrid High Court has frozen the privatization of the management of 6 hospitals in the region following a suit filed by the PSOE.

The regional government, which is controlled by the PP, last week awarded the management of the hospitals in question as of September to 3 private healthcare management groups: Hima-San Pablo, Bupa Sanitas and Ribera Salud. The hospitals serve 1.6 million people at an annual cost of €750 million. The local administration argued that the privatization would reap annual savings of €169 million.

Spain's regions have been obliged to slash spending on health and education as part of the government's draconian austerity drive to rein in the budget deficit.

The Socialists' suit centered on last-minute corrections made by the local health department to the terms of the privatization, which reduced by 90% the initial amount the firms awarded the management contracts had to advance in the form of guarantees.

The Court ruled that there were sufficient grounds to examine the circumstances under which the contracts were assigned, particularly as regards the amount of guarantees required. In its ruling, it said the initial guarantees required could have acted to limit competition for the contracts up for grabs.