Due to slow pace of construction work, Stradins Hospital may fail to utilize EU funds worth EUR 60 million - interim supervisory board member

RIGA - Due to the slow pace of construction works, Pauls Stradins Clinical University Hospital could fail to utilize as much as EUR 60 million of European Union (EU) funding, not just EUR 46 million as the media reported earlier, as the hospital's interim supervisory board member Normunds Stanevics, who also serves as chairman of the hospital's management board, said in an interview with Latvian Television on Tuesday.

Stanevics hopes very much that the EU funds unutilized by Stradins Hospital will be reallocated for construction of the Children and Youth Mental Health Centers at Children's Clinical University Hospital, but at the same time he is under no illusion that all this money will be utilized this year.

There are actually only two full months left this year and the hospitals and their potential partners do not have the capacity to spend such large amounts of money in such a short period time in line with the EU requirements, as more time is needed for both the purchase of equipment and construction, and there are other quite ambitious projects that also need to be completed on time.

Stanevics confirmed that he was meeting weekly with representatives of Velve, the company building a new wing for Stradins Hospital, who claim that they are planning "get the building under roof and finish the framing" by the end of the year so that they could continue with interior works during the winter. However, what Stanevics actually sees on the construction site is not very inspiring as the construction work is proceeding slowly.

As reported, shareholders of Pauls Stradins Clinical University Hospital (PSKUS) at an extraordinary meeting on October 5 removed the hospital's supervisory board and appointed an interim board.

According to data available at Firmas.lv, since February 2020 the hospital's supervisory board included Reinis Ceplis, Juris Lapse and Renalds Jurkevicjus.

Auga Balode, the Health Ministry's state secretary and representative of PSKUS shareholders, said at the extraordinary shareholders' meeting that the PSKUS supervisory board failed to carry out a timely and in-depth assessment of risks and their short and long-term impact on the hospital's value, sustainability and responsible development. As a result, the hospital now risks losing around EUR 46 million worth of EU funding.

"Considering the essential role of the hospital's A2 Building in the patient treatment process, which is threatened by the board's current project and risk management, the representative of the hospital's shareholder decided to remove the board and elect a new - interim - board," said Balode.

Stanevics was elected to the PSKUS supervisory board and tasked with improving the management of the hospital's development projects and promoting staff cooperation.

Peteris Stradins, Professor of Surgery at Riga Stradins University (RSU) and Head of the Cardiac Surgery Unit at PSKUS, was elected to the interim supervisory board to oversee medical matters.

Iluta Riekstina who was also elected to the PSKUS interim supervisory board, has been a board member of the Children's Clinical University Hospital since 2019 responsible for financial planning and accounting management, economic and statistical process management, procurement and contract processes, information systems and ICT management, e-health matters, as well as the management of investment projects. Riekstina's will be in charge of the management of financial and construction processes.

According to the Health Ministry, the shareholder expects the interim board to act responsibly and has defined the most urgent tasks. The interim board is to conduct an external audit of the management of the European Regional Development Fund's project "Development of the New A2 Building at Pauls Stradins Clinical University Hospital" and to ensure that a mediation service provider is involved for the project's successful implementation.