Feasibility Study of NEMEMW&TC and TEMO

1. An Assignment of Joint Donor Technical Assistance Fund (JDTAF) Conducted by, Foyzul Bari Himel Feasibility Study of NEMEMW&TC and TEMO

2. Objectives of the Assignment • Evaluate possible structure for: • National Electro Medical Equipment Workshop and Training Center (NEMEMW&TC) • Transportation Equipment Maintenance Organization (TEMO) • Proposed Options: • Spinning Off into a Public Corporation • Outsourcing Services from Private Companies

3. Approach • Step 1: Feasibility of the Proposed Structures • Whether the proposed structures are operationally feasible • Whether the proposed structures are financially feasible • Step 2: Comparison among structures in the perspectives of • Cost • Risk • Performance

4. Methodology • Sources of Information • Secondary Source • Primary Source • Information Collection Method • Secondary Literature Review • Face to Face Interview with: • HSM Officials (LD, HSM, Project Managers) • NEMEMW&TC Officials (CTM, TMs, Technicians, other officers) • TEMO (WM, AO, SAE, other officers) • Public and Private Hospitals and Health Facilities • Private Transportation Equipment Maintenance Entities • Private Electro Medical Equipment Providers

5. Findings on National Electro Medical Equipment Maintenance Workshop and Training Center

6. Functions of NEMEMW&TC National Electro Medical Equipment Maintenance Workshop and Training Center Service Provider Services • Equipment Procurement Assistance • Technical Specification Development • Evaluation of Procurement Bids • Equipment Commissioning • Installation • Calibration • Equipment Maintenance • Preventive Maintenance • Corrective Maintenance (Electrical, Electronics, X-Ray, Mechanical, Optical, A/C) • Training • On Commissioning • On Maintenance Services Recipients • Government Hospitals and Health Complexes • Public Medical Educational Institutes • Public Medical Research Entities CMSD Planned but Unavailable Service Regular Service Intermittent Service

7. NEMWM&TC: current Human Resources

8. NEMEWM&TC: Assets and Other Resources • 1 acre land area • 1 administrative building, • 1 workshop • 5 vehicles • 1 full fledged inventory of spare parts • 6 repair sections – electrical, electronics, X-ray, optical, A/C, and mechanical refrigeration • 1 training section with demonstration and trainee accommodation facilities

9. NEMEWM&TC: current status of services

10. Reasons for Underperformance • Technical Resource Pool: much smaller than required size (35 Technicians for over 700 GOB hospitals) • Lack of system for continuous Updating of Technical Knowledge • Rigid structure barring demand driven changes in service provision; • Human resources structure not revised despite increased demand of electro medical equipment maintenance services; • No Management Autonomy allowingself-generation of revenue to supplement the budget or any incentives to do so; • Budget allocation not in pace with increasing demand for maintenance services;

11. Can NEMEMW&TCfunctions be outsourced to Private Agency? • Currently the private electro medical equipment industry in Bangladesh is notready to takeover the functions of NEMEMW&TC REASONS • Performance Perspective of Electro Medical Equipment Suppliers : • do not have large enough inventory of equipment and spare parts to cover all GOB health care facilities • Human resource pool is not large enough to serve all the service recipients • Technical skills not diversified enough to maintain equipment of all companies and country of origin

12. Reasons? • Risk Perspective • Volatile nature of industry, no policy for electro medical equipment business, no association or business member organization to regulate service provider’s business behavior, no apparent exit barrier • Limited investment from the suppliers, no workshop or infrastructure setup, limited investment, dependency on mother company for spare parts and equipment replacement • Existing technical human resources of NEMEMW&TC will not be able to reinstate in other departments within ministry, private service providers do not have the capacity to consume the entire technical human resources pool, potential risk of employee unrest

13. Reasons? • Cost Perspective • Existing spare parts and equipment inventory is suitable only for older equipment installed in GOB health facilities, and hence would not be possible to sell, resulting wastage • Existing technical human resources are required to be compensated in return of cash, as it is not possible to reinstate them within ministry • Service charge from Private service providers will be high, resulting additional cost involvement for CMSD

14. NEMEMW&TC way forward: spin off into Public Corporation (Corporatization) • As a public corporation, the organization can: • Grow more flexibly based on business needs and growth plans prioritizing service provision: • can hire HR based on skill needs; • purchase demand based equipment and spare parts; • Provide quality services: respond to service request at the quickest time and at lower cost through revitalization of DEMEWs; • Generate own revenue; • Relate performance with finance, motivating the employees to perform and enhance satisfaction • Maintain impartiality in providing services to public medical facilities through CMSD; • Greater accountability as the corporation will be responsible for its profit and loss;

15. NEMEMW&TC way forward: proposed services to generate revenue

16. NEMEMW&TCway forward: potential customer base Technical Educational Institutes CMSD Advocacy Training & Technical Assistance NEMEMW&TC Medical Education and Research Institutes Installation Govt. Hospitals Consultancy Private Hospitals, Clinics, Medical Colleges Maintenance Govt. Upazila Health Centers DEMEW Service Provision Service Charge Payment

17. NEMEMW&TC way forward: proposed specific steps • Conduct survey for electro medical engineering services both in public and private sectors to identify – • Specific areas of service demand and extent of service requirements in each area; • Potential clients segregated into public and private sectors; • Estimated cost of the service provision; • Service charge that the potential customers think feasible enough • Develop Business Plan based on survey findings including: • Services to be provided; Determining Service charge; • Service delivery modality; Cost analysis for service delivery; • Revenue Generation Plan;

18. Way Forward for NEMEMW&TC • Develop an Organizational Plan incorporating – • specific structure for board of directors; Executive management and implementation level; • staffing plan in line with market demands and revenue target of the company. • This should also include specific salary, allowances and other benefits of the staffs to ensure required employee satisfaction • Legal issues associated with the restructuring including risks, and mitigation measures for those

19. Findings on Transportation Equipment Maintenance Organization (TEMO)

20. Background of Establishment • To ensure regular maintenance and mobility of vehicles under MOHFW health facilities • Service Mandate – • Technical Assistance to CMSD • Maintenance, both preventive and corrective, of vehicles of MOHFW in and outskirts of Dhaka

21. Workshop Manager (1) Sub-Asst. Engineer (1) Store Officer (1) Accountant (1) Administrative officer (2) Store man Tech (2) Clerk/Typist (2) Chief Guard (1) Driver (6) Peon (3) Cleaner (2) Guard (8) Sr. Mechanic (5) Sr. Electrician (1) Driver cum Mechanic (3) Body repairer (3) Jr. Mechanic (13) Jr. Electrician (3) Wielder (2) Painter (3) Cleaner (12) Current Organizational Structure

22. Functions Performed • Technical Assistance to CMSD • Provide Technical Specification for vehicles to be procured • Assist in bidding evaluation • Inspection of supplied vehicles against quoted specification • Maintenance services in the following areas: • Power transmission and Auto-electrical, • Engine troubleshooting, • Engine overhauling, • Chassis related functions • wheel alignment and related services. • Body Works

23. Assets and Resources • 1 Acre of Land Area • 1 Administrative Building • 1 Workshop Shed with required equipment to maintain vehicles • 1 Store room, 1 guard room, 1 dinning room and 1 parking shed • 3 Vehicles • Six functioning sections - Power transmission and Auto-electrical; Engine troubleshooting; Engine overhauling; Chassis related functions; wheel alignment and related services; and Body Shop

24. Performance under existing Structure • Satisfactory service delivery to CMSD • Less than 20% of required preventive service provided to the MOHFW vehicles within and outskirts of Dhaka • Less than 50% of required corrective maintenance services provided to the aforementioned vehicles • Lengthy process in availing required services • Troublesome service reception for the recipients since there is only one workshop and located in Mohakhali, which is rather inconvenient for many health facilities even in Dhaka

25. Reasons for Underperformance • Inadequate technical persons (only 47 with only 8 senior technicians) to provide maintenance services for all the vehicles under MOHFW and its implementing agencies within and outskirts of Dhaka • Large number of non-technical persons (28) resulting in high overhead cost • Rigid structure barring demand driven change in service provision and incorporation of human resources with updated knowledge to provide better services • Centralized service provision from the workshop in Mohakhali, a place which is inconvenient for most of the health care facilities in Dhaka and the outskirts;

26. What Happens if TEMO is to turn into a Public Corporation • Operationally it is feasible but it will not increase performance to a large extent

27. Why Performance Would Not be Enhanced in Public Corporation Structure? • No competitive advantage over private service providers in terms of variation and efficiency of service provision • No special service offer to attract private vehicles and increase revenue • Service provision will still continue from a central location, with existing problems of inconvenience for vehicles to avail services • Maintenance capacity will not be increased to a significant level, the structure would not be able to provide services to a large number of vehicles, revenue generation will not be enough to sustain itself, reliance on government funds or DPs

28. Can TEMO functions be outsourced from Private Service Providers • Majority of the functions can be outsourced from Private Service Providers

29. Justification for Outsourcing Services to Private Service Providers • Private vehicle maintenance sector is well established and equipped with over 25,000 maintenance facilities throughout the country; 5,000 in Dhaka; • Larger facilities have huge investments averaging BDT 400 million and capacity to assemble vehicles; • Even smaller ones have capacity to provide regular maintenance services for all types of vehicles • Strong association of service providers regulate business behavior; • Minimum Risk of service discontinuity; • MOHFW vehicles outside Dhaka are already availing services from private providers;

30. Which Services cannot be outsourced? • Providing technical assistance to CMSD in : • Developing procurement specifications • Evaluating technical bids • Ensuring quality of the supplied vehicle as per the specification

31. So what is the Feasible Structure to Ensure Functions of TEMO? MOHFW Ministry Pays TEMO Staffs Reporting TEMO (Smaller Structure, Mostly Technical People, 7-8 Positions) A Pool of Private Service Providers (Located in and outskirt of Dhaka) Monitoring Vehicle Maintenance Services CMSD Pays for Services Technical Assistance Vehicles under Government Health Facilities within and outskirts of Dhaka CMSD

32. What will happen to existing human resources and inventory of TEMO? • Option 1: • Placing existing technical resources to Central Vehicle Maintenance workshop under the Directorate of Government Transport • Placing non-technical personnel in different departments of the ministry • Selling infrastructure, inventory and other physical resources • Option 2: • Convert TEMO into an employee cooperate led entity • Handing over physical infrastructure to the cooperative • Cooperative to operate as independent vehicle maintenance entity like the private service providers • Option 3: • Releasing employees -“Golden Handshake” scheme • Allocating physical infrastructure and other resources in dispense of other agencies under the ministry

33. Thank You