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IESS debt is unfettered according to Richard Espinosa
Posted On 19 Sep 2016
Chairman of the IESS Richard Espinosa, justifies the debt the institution will get to finance the works of hospitals.
Q. What is the purpose of traveling to Europe?
A. It is important to note that for the first time in history the IESS is investing resources in hospital infrastructure: $ 700 million in a year and a half. The idea is to assist affiliates, retirees and citizens, in a faster way with our own infrastructure. We will save that profit margin private hospitals currently earn and we will save expenses by assisting people directly … If we get the credit we will be able to advance the planned infrastructure for 2019 and 2021 in 2016 and 2017. If the credit is not obtained nothing happens, the bad thing is that we would not be able to save costs.
Q. We’re talking about $ 80 million in loans already obtained and other $ 80 million more. How will the rest of the construction costs be funded?
A. The final cost is $ 460 million. We do have the money, construction works are not in danger, but we always said that if those resources come to us through loans, this allows us to release ours in order to allocate them to other projects. Credit conditions are 4 or 5 years at a 6% rate. Compared with the investments we put, we win. Any financier knows that the best business in the world is to work with other people’s money.
Q. If the Government had not removed the 40% contribution and if it had not disregarded the health debt, would not have the IESS had to borrow?
A. The IESS in 2006 had a portfolio of $ 2,800 million and now has one of $ 17,400 million. If the decision of investing was not taken, it would that liquid money for infrastructure. But our practice is to keep investing, thus the economy is invigorated. There are about $ 7,000 million in mortgages, almost $ 3,000 million in loans and $ 1,000 million in the productive sector. In addition there are more than $ 7,000 million in government bonds that generate returns 25 times higher than was generated abroad before (I).
