After seven years leading at the Royal Adelaide Hospital, Celsus CEO Di Mantell GAICD is a strong advocate for private-public partnerships and collaborative governance. 

    Di Mantell GAICD understands that being a celebrated “first” project has a flip side, so you have to pave the way. As CEO of Celsus, the special- purpose company responsible for managing the consortium that financed, designed and built the Royal Adelaide Hospital, and which now manages and maintains the 800-bed facility, Mantell has overseen South Australia’s first public-private partnership (PPP), the first large hospital to achieve a 4-Star Green Star “As Built” rating and the largest combined green/social loan in global healthcare.

    “The good thing about being first is that you’re first and it’s all very exciting,” says Mantell. “The bad thing is that there was no environmental and social finance framework, so we had to write it. While we leveraged off some advisers to do that, we wrote the finance framework and then we had to write a green and social ESG strategy framework.”

    Seven years since the Royal Adelaide Hospital opened in 2017, Mantell remains a strong advocate for the PPP model. Medical and clinical aspects are operated by the government, while the non-clinical services of the $2.2b quaternary (an extension of tertiary care with highly specialised levels of medicine) hospital are operated by Celsus under a 30-year contract to 2046.

    Mantell notes this is an effective way to balance the strengths of both the public and private sector. “Generally, most people don’t know about PPPs,” she says. “They don’t understand that we provide the money that enables the government to build amazing infrastructure and that the infrastructure is improved. Leveraging off those relationships with the public and private sector enables us to do incredible things.”

    Healthcare on the frontline

    When there is a request for a specific action or equipment within the hospital, Mantell understands what they need and why. More importantly, she has the ability to explain it to others in the team. This is because she used to work on the frontline.

    Starting her career as a registered nurse in regional NSW, Mantell mainly worked in critical care. Subsequently, she took jobs in regional areas, including as the executive director of nursing and support services in Kalgoorlie. Mantell credits the experience as formative for her decision-making skills and ability to adapt, attributes that are important now in her corporate roles. “It teaches you a lot about resilience when you don’t have everything on hand to help,” she says. “The fact that most of my clinical time was in critical care teaches you to think quickly. Crisis management has proven a really good trait to have. I’m not somebody who needs to be completely structured, I can roll with it to a certain extent.”

    Mantell then moved into executive roles in the WA Department of Health as executive director of Workforce and later as GM facilities management at Perth’s Fiona Stanley Hospital. “I understood what government needed and why,” she says. “Having that background has really helped me.”

    Australia’s most expensive building

    While Mantell was working in Perth, the SA government had revealed plans to develop a new hospital on an old railway site in the central business district. Then premier Mike Rann said the proposed Marjorie Jackson-Nelson Hospital would cost $1.7b and be ready for patients by 2016.

    “What we’re budgeting for today is the greatest hospital development in Australian history here in SA,” Rann said at the time. “This is about a transformational hospital development that’s about improving health care across our state.”

    Everything about the project was large-scale. The size of three city blocks on a 3.8ha site, the hospital also featured leading sustainability and technological design and features. However, the name, site, construction and process all became high-profile media and political lightning rods.

    It was decided the name would remain Royal Adelaide Hospital and construction started in 2011, when the governance agreement was devised. This established the strict oversight, contractual and reporting requirements for the PPP.

    Mantell started in 2014 as Pacific Partnerships operations director, charged with delivering the building from construction site to an operating hospital. She became Celsus CEO in 2017 and says the governance arrangements are complex and highly structured, given the multiple obligations from a number of contractors and stakeholders due to the risk transfer and the financial structures.

    “We’ve got three parties in an arrangement until 2046. Everybody is clear about what they require. It showed a lot of vision for the government at the time to say it wanted to build this really expensive hospital and the best way to do that was to leverage off the innovation of the private sector and hold them accountable for bringing forward that innovation. They hadn’t done a PPP before... and the relationships weren’t there at the start.”

    More than a decade on, the Royal Adelaide Hospital now treats about 85,000 inpatients and 600,000 outpatients each year.

    World’s biggest sustainability loan in health

    In 2021, Celsus refinanced its $2.2b facility for the PPP in what was the largest sustainability loan in the global healthcare sector and the largest project finance green and sustainability loan in Australia, backed by a consortium of 14 lenders.

    Sustainability loans seek to finance environmental and climate projects and those that offer strong social benefits. The hospital PPP was a key asset in AMP Capital’s Community Infrastructure Fund. Following the acquisition of AMP Capital’s domestic real estate and infrastructure businesses by Dexus, and follow on investments, there are now three Dexus managed funds representing circa 72 per cent of Celsus. Other investors in the consortium include abrdn and MMCP.

    Mantell says the original contract didn’t require any additional ESG obligations. “In 2011, ESG wasn’t a thing.” However, the green and social loan demands additional obligations and reporting metrics covering water use, recycling, greenhouse gas emissions and waste, as well as social impacts. “Even though we aren’t contractually bound to do them, they are the right thing to do,” she says.

    Mantell says they were refinancing at the time that the Asia Pacific Loan Market Association was devising both the green and social loan principles, which sparked the idea. Independent assurance was achieved via the DNV Global Assurance, and Celsus’ credentials were assessed against the UN Sustainable Development Goals. It became the largest healthcare ESG- labelled loan in the region.

    “We ended up doubly subscribed,” she says. “We had a framework and a strategy and we knew what we wanted to do. It’s easy to go for the new shiny thing, but with a strategy and framework, you can go through what is required. ESG is not in the contract so the Celsus board showed enormous commitment to work with us to do these projects.”

    Celsus board chair Mark Balnaves says that throughout her time as CEO, Mantell has sought to build governance structures to ensure they could function at a high level and under pressure. Given the operating environment of the hospital, Celsus governance structures are under constant pressure, which can elevate on short notice.

    “Critically, Di has underpinned these structures with outstanding communication — with myself, the board, our stakeholders and partners,” says Balnaves. “This constant dialogue of listening, engaging, making decisions and explaining has enabled Celsus to manage numerous time-critical issues and to achieve innovative outcomes.”

    Reporting requirements

    Oversight of these complex arrangements requires equally complex reporting. Mantell says in addition to reporting to the Celsus board, there is reporting to the 15 financiers, three levels of government, the minister, a contract administration team and the Central Adelaide Local Health Network.

    “It is highly structured and well-articulated — they are very clear on what our obligations are,” she says.

    The social and green loan also generates sustainability reporting to directors monthly, and in a formal report annually. However, Mantell says the ultimate focus is always healthcare.

    “The patient is at the centre of everything we do. Even though we’re not responsible for providing clinical services, what we provide is for the benefit of patients and the people of SA. Any obligations we have are around ensuring the building operates 24/7. Our obligation is to make sure we do everything we need to do so that the clinicians can do what they need to do.”

    Mantell says her career journey and her role as a CEO from a non-finance background highlight the importance of taking chances as they come. She recommends people take the opportunity to work in a rural or regional setting for increased exposure to a range of experiences. Being open to learning, either through mentoring or structured courses, is also important to expand opportunities.

    “It’s definitely not where you start, it’s where you finish,” she says. “When I was a nurse starting in Albury, I never thought this was where I was going to be. It was important I took opportunities that were presented to me. I get in and try to find the best way to solve the problem.”

    This article first appeared under the headline 'Working Together’ in the July 2024 issue of Company Director magazine.

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