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

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

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

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

Findings on National Electro Medical Equipment Maintenance Workshop and Training Center

Functions of NEMEMW&TC

National Electro Medical Equipment Maintenance Workshop and Training

Center

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

Service Provider

Services

CMSD

•Government Hospitals and Health Complexes

•Public Medical Educational Institutes

•Public Medical Research Entities

Services Recipients

Regular Service

Intermittent Service

Planned but Unavailable Service

NEMWM&TC: current Human Resources

PositionStatus of HR

Sanctioned Posts

Currently available

Vacant

CTM, TM, AE

1st class officer 13 3

10

AO, Sub AE, PO

2nd class oficer 14 10

4

Sr. Tech, Tech 3rd class 46 35

11

4th class 21 156

Total 94 6331

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

NEMEWM&TC: current status of services

Services Gaps in Service Provision

Equipment Procurement Assistance • None

Equipment Commissioning

• Very limited installation services, only if the vendor does not provide it

• No calibration services

Equipment Maintenance

• No preventive maintenance• Less than 30% of required corrective

maintenance• Maintenance provided only for older

equipment • No service is provided for latest and or highly

technical equipment

Training

• Intermittent provision of services• No service was provided in last few years• Training depends on availability of fund from

GOB or DPs

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 allowing self-generation of revenue to supplement the budget or any incentives to do so;

Budget allocation not in pace with increasing demand for maintenance services;

Can NEMEMW&TC functions be outsourced to Private Agency? Currently the private electro medical

equipment industry in Bangladesh is not ready 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

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

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

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;

NEMEMW&TC way forward: proposed services to generate revenue

Advisory

Technical Specification Development

Technical Evaluation of Procurement

Bid

Inspection of Equipment Quality for

Goodness of Fit

Commissioning

Calibration

Installation

Maintenance

Preventive Maintenance

Corrective Maintenance

Consultancy

Facility Layout

Equipment Planning

Training and Technical

Assistance

Training

Workshop Facility Rental

NEMEMW&TC way forward: potential customer base

NEMEMW&TC

DEMEW

CMSD

Medical Education and

Research Institutes

Govt. Hospitals

Govt. Upazila Health Centers

Advocacy

Maintenance

Private Hospitals,

Clinics, Medical Colleges

Consultancy

Technical Educational Institutes

Training & Technical Assistance

Installation

Service ProvisionService Charge Payment

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;

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

Findings on Transportation Equipment Maintenance Organization (TEMO)

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

Current Organizational Structure

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)

Guard (8) Peon (3) Cleaner (2)

Sr. Mechanic (5) Sr. Electrician (1) Driver cum Mechanic (3)

Body repairer (3)

Jr. Mechanic (13)

Cleaner (12)

Jr. Electrician (3)Wielder (2) Painter (3)

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

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

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

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;

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

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

Can TEMO functions be outsourced from Private Service Providers

Majority of the functions can be outsourced from Private Service Providers

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;

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

So what is the Feasible Structure to Ensure Functions of TEMO?

TEMO (Smaller Structure,

Mostly Technical People, 7-8 Positions)

A Pool of Private Service

Providers (Located in and

outskirt of Dhaka)

Vehicles under Government

Health Facilities within and outskirts

of Dhaka

MOHFW

CMSD

Reporting

Technical Assistance

Monitoring

Vehicle Maintenance Services

CMSD Pays for Services

Ministry Pays TEMO Staffs

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

Thank You