Below is a graphical representation of the above tables, showing impact on Project IRR of changes in key assumptions: Figure 11: Projected IRR sensitivity to changes in key assumptions Project IRR Sensitivity Analysis 20,0% 18,0% 16,0% 14,0% 12,0% 10,0% % Change in Variable 8,0% -10% -5% 0% 5% 10% 15% -15% Opex % Capex % Tarr ifs % Occupancy % As depicted above, the project cash flows are quite sensitive to material changes in the underlying key assumptions. Changes in Capex has the least impact across all the evaluated key indicators. The key indicators are sensitive to changes the following assumptions, ranked in order of impact: 1) Tariff changes 2) Operating costs 3) Occupancy rates 14. ENVIRONMENTAL, HEALTH AND SAFETY 14.1. Town Planning and Zoning The site is now appropriately zoned for the hospital development following the SPLUMA approval that was issued on 18 June 2020. KING CETSHWAYO PRIVATE HOSPITAL PROJECT – PIM: JULY 2020 P a g e | 51
14.2. Environmental Impact Assessment The hospital development was granted environmental authorisation as reflected in the Record of Decision dated 18 December 2018. Final approval of EIA was obtained on 30th January 2019 from Ulundi Local Municipality 14.3. Health & Safety Management The design and construction will comply with the Health and Safety Act Regulations No. 85 of 1993 as amended by Occupational Health and Safety Amendment Act, No. 181 0f 1993. This will include other statutory regulations like the national building regulations. The Health and Safety Consultant will manage the production of the Health and Safety Specifications for the project. They will be issued with the tender documentation. The Project Health and Safety file will be retained on site and is the responsibility of the Main Contractor. The File must be maintained in accordance with the Health and Safety Act. Day-today site safety I the responsibility of the Principle Contractor in accordance with the procedures set out in the Health and Safety Management Manual and Health & Safety Regulations. All project staff has a responsibility to comply with the site rules and their own Company Safety Policy. 14.4. COVID-19 Policy and Procedure The Board of King Cetshwayo Private Hospital and the Hospital Management Company will use the prescriptions of the Occupational Health and Safety (OHS) Act of 1993 in governing workplaces in relation to Coronavirus Disease 2019 (Covid-19). The OHS read with the Hazardous Biological Agents Regulations requires the employer to provide and maintain as far as is reasonably practicable a working environment that is safe and without risks to the health of employees. King Cetshwayo Private Hospital will implement measures of control in terms of limiting the spreading of Covid-19 at the workplace. KCPH will also ensure that its Constructors complies with the OHS Act and during the construction of the facility. 15. OPERATING AND PERMIT ATTAINMENT PROGRESS 15.1. Pre-Construction The status of all the approvals and permits that need to be in place to commence with the hospital construction are summarized below: Description Status / Comment Valid Hospital License Secured Land Secured – Extension of Expired Land Lease in Progress Letter of Support from His Majesty – King Goodwill Zwelithini Secured Letter of Consent from Mpungose Tribal Authority Secured KING CETSHWAYO PRIVATE HOSPITAL PROJECT – PIM: JULY 2020 P a g e | 52
Description Status / Comment Services Agreement with Ulundi Municipality Secured Confirmation of Bulk Services Letter by Ulundi Municipality Secured Confirmation of Water and Sewer Letter by Zululand Secured Environmental Impact Assessment Secured Heritage Approval Secured Water Use License Approval – Department of Water and Sanitation Secured Rezoning Support Letter – Ulundi Municipality Secured Zoning Approval (SPLUMA) Secured DOH - Plan Approval Secured SDP Plan – Approval by Municipality Secured Building Plan – Approval by Municipality In Progress SG Diagram Approval Yet to be secured Consent to Commence with Construction by Department of Labour Yet to be secured 15.2. Post Construction The status of all the approvals and permits that need to be in place in order to commence commercial operations are summarized below: Description Status / Comment Occupation Certificate Yet to be secured Pharmacy Council Approval - Pharmacy License Yet to be secured Department of Health Approval (post - inspection) – Operating License 1 Yet to be secured 16. BROAD BASED BLACK ECONOMIC EMPOWERMENT KCPH embraces the spirit of the BEE legislation and will ensure compliance with the following regulations and codes during construction as well as operation of the hospital: Broad-Based Black Economic Empowerment Act, 2003 (as amended); the generic Codes of Good Practice on Broad-Based Black Economic Empowerment (BEE Codes). The revisions to the 2007 version of the BEE Codes were issued on 11 October 2013 and came into force on 1 May 2015; and sector-specific Codes of Good Practice (Sector Codes). KING CETSHWAYO PRIVATE HOSPITAL PROJECT – PIM: JULY 2020 P a g e | 53
17. ANNEXURES The following Annexures (Supporting Documents) are available separately: Annexure 1: CIPC Annexure 2: DOH Approval (license) Annexure 3: Drawings (Munic / DOH Approved) Annexure 4: Royal Approval Annexure 5: Elemental Estimates Annexure 6: Financial Model Annexure 7: Market Study Annexure 8: EIA & TIA Annexure 9: Lease Agreement (Ingonyama Trust) Annexure 10: Professional Team (Profiles) KING CETSHWAYO PRIVATE HOSPITAL PROJECT – PIM: JULY 2020 P a g e | 54
KING CETSHWAYO PRIVATE HOSPITAL PROJECT – PIM: JULY 2020 P a g e | 55
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