WRITTEN QUESTION E-0161/98 by Mary Banotti (PPE) to the Commission (2 February 1998)

Subject: Gaza European Hospital

Can the Commission inform me of the cost of the total investment by the EU in the Gaza European Hospital?

Can the Commission inform me when the International Management team will be arriving in the region?

When will the hospital be fully operational and what is the Commission's policy in meeting the recurrent costs of the large scale infrastructure projects in developing countries?

Answer given by Mr Marin on behalf of the Commission (16 March 1998)

In 1990, it was decided that the United Nations relief works agency (UNRWA) would construct a hospital with the financial aid of the Community. The objective of the project was to provide the Gaza Strip (under Israeli occupation at that time) with a modern, general hospital to supplement existing facilities which were grossly inadequate for the rapidly expanding population.

In 1990, the Community committed an initial 1 MECU towards starting the construction by UNRWA of the hospital. The following year, a further 12 MECU were committed, on the basis of existing costing, for the completion of the construction.

Due to the political situation and, in particular, the Intifada and the closure policy imposed by Israel, the implementation of the project was considerably delayed. In addition, some improvements in the design of the hospital due to changing definitions of health needs, closely linked to questions of access to and from Israel, were necessary. All this provoked time and cost overruns. Therefore, UNRWA requested donors to further contribute to the hospital. In 1995, 7.5 MECU were committed towards the completion of the construction of the hospital.

Following the request of UNRWA, in 1996, for a further 20 MECU, an investigation launched by the Commission concluded that although construction was 98% complete, both significant remodelling work and more equipment and supplies were needed before the hospital could admit patients. Therefore, the Community committed 4 MECU in 1996 for the physical remodelling. A further 5.2 MECU were committed in 1997 for the provision of equipment and supplies. The implementation of both projects will start once the international management team is in place.

The terms of the understanding signed on 12 October 1997 by the Palestinian authority, UNRWA and the Commission, foresee the selection and establishment of an international management team. The Commission will contract the international management team, for which the call for tender will be launched soon. It is difficult to advance an exact date for the establishment of the team, but it might be during the spring 1998.

It is expected that the hospital will be finished by mid-1999 (that will depend on the date the international management team is in place). According to the terms of understanding, from the date that commissioning is complete, the hospital will be an institution of the Palestinian authority minister of health and an integral part of the Palestinian health care system. As such, ownership and policy responsibility will rest with the ministry of health, which will assume responsibility for all assets, insurance policies and indemnities, and any future liabilities and commitments attached to the hospital. The hospital has already been given by the Palestinian authority a separate legal personality with a special budget and staff salary level.

The Commission's general policy on this issue is that recurrent costs are not eligible for assistance. However, the Commission may, in certain limited circumstances, be prepared to contribute to recurrent costs over a period of not more than three years. In the special case of the assistance to the Palestinians, the Commission has proposed, following a suggestion by the Court of auditors, an amendment ((COM(97) 552 final. )) to the Council Regulation (EC) No 1734/94 of 11 July 1994 on technical and financial co-operation with the occupied territories ((OJ L 182, 16.7.1994. )), which is now in discussion within the Parliament and the Council that would allow the Commission to support recurrent costs of the Palestinian authority in certain circumstances. The very specific political and administrative situation of the Palestinian authority and the region in general has given rise to this necessity.

In the specific case of the European Gaza Hospital, the Commission considers that, taking into account the great financial effort that it has made so far for the construction and finalisation of the hospital, from the moment that it is commissioned to the Palestinian Authority, no contribution will be made to cover recurrent costs.