Stradins Hospital might lose up to EUR 70 million in construction of new wing

RIGA - Pauls Stradins Clinical University Hospital (PSKUS) may lose as much as EUR 70 million instead of the previously mentioned EUR 46 million in the construction of the new blocks, Normunds Stanevics, a member of the hospital's interim supervisory board, told LETA.

He said that this is why the new management board has been selected with strong crisis management knowledge and its work will be oriented towards reducing losses, saving what is still salvageable. 

Commenting on the decision to recall the PSKUS management board, he said that there is the risk of losing close to EUR 70 million. Such losses would jeopardize the hospital's short- and long-term development and patient safety.

Since the the old supervisory board has been suspended and the new interim supervisory board has been appointed in early October, the supervisory board has made a number of recommendations and visions to improve the design and supervision of the construction of the new building, but nothing has been implemented by the management board. Stanevics pointed out that several meetings had been held with the staff, individually and collectively, and that there was a great deal of tension within the staff, but no steps had been taken by the board to de-escalate the situation.

"These three reasons left no option but to remove all management board members from their positions, appointing an interim crisis management board. It will be very focused on reducing losses," Stanevics said.

As reported, the supervisory board of Pauls Stradins Clinical University Hospital (PSKUS) has expressed no-confidence in the hospital's management board, removing Rinalds Mucins, Ilze Kreicberga, Janis Naglis and Agra Melne from their posts, the supervisory board's adviser Gundega Varpa informed LETA.

In accordance with provisions of the Law on Governance of Capital Shares of a Public Person and Capital Companies, the hospital's supervisory board has appointed an interim management board which will be running the hospital for one year. Lauris Vidzis has been appointed chairman of the management board and Dzineta Heinrihsone and Girts Ansons have been appointed members of the PSKUS management board.

The new interim board members have a high level of expertise in management, medicine and finance, informed Varpa.

The new PSKUS management board will start work on October 28.

Varpa indicated that a news conference has been called at the hospital at 15:00 today to inform on the supervisory board's decisions and the interim management board's immediate tasks.

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.