Delhi govt plans to explore PPP model for completion and operation of 11 underconstruction hospitals
New Delhi: With a requirement of nearly Rs 9,000 crore for the completion of 11 underconstruction hospitals and the need for the creation of 42,000 additional posts of medical, para-medical, administrative and support staff, Delhi govt is likely to explore the possibility of completion, commissioning, operation and maintenance of these upcoming health facilities on a public-private partnership (PPP) model.
Sources said the health and family department of Delhi govt might soon engage a transaction adviser to get "technical, financial and legal analysis" of different aspects of PPP, which would help in choosing an appropriate model and setting the standards for the selection of a credible private entity to deliver the project.
The proposal seeking in-principle approval for exploring PPP models and the hiring of a transaction adviser is likely to be placed before the council of ministers soon.
The report and recommendations of the transaction adviser will again be placed before the cabinet for "guidance and decision", sources said. They added that chief minister Rekha Gupta held a high-level meeting on May 21 when the decision to explore the PPP mode to complete and operationalise these hospitals was taken.
While four multi-specialty general hospitals are coming up in Jwalapuri, Madipur, Hastsal and Siraspur, seven exclusive ICU-bedded hospitals are being built in Shalimar Bagh, Kirari, Sultanpuri, Geeta Colony, Dilshad Garden, Sarita Vihar and Raghubir Nagar.
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The 11 new health facilities were taken up for construction in 2020 and 2021 after the Covid-19 pandemic hit the world. While the construction of four general hospitals started between Sept and Nov 2020, the seven ICU-bedded health facilities were sanctioned in Sept 2021. Sources said no physical progress has taken place in these projects in the past few months. All the hospitals were to be built on priority, but have missed several deadlines due to the paucity of funds.
The finance department of Delhi govt flagged a serious "resource crunch" in Sept 2024.
In its proposal for considering the public-private partnership model and hiring the transaction adviser, the health department argued that the construction cost already escalated by almost 50% — from Rs 2,663 crore of the initial estimates to Rs 3,947 crore — and to make these hospitals operational, mobilisation of critical resources such as healthcare manpower and medical and non-medical equipment would be required to be put in place.
Officials said that commissioning and operation of these 11 hospital projects entailed huge financial allocations, besides the burden of creating thousands of posts, a long recruitment process, and an annual recurring financial burden on their operation. The private enterprises will bring capital, manpower and requisite expertise, and recover the investment through reasonable revenue generation from operation.
Sources said that the transaction adviser would also determine the present status of infrastructure, study the legal aspects of the existing contractual agreements of the ongoing construction, and assess the risks in smooth transition to the PPP mode. A project management unit will be set up in the health and family welfare department, with a special secretary as its head, which will provide support to the transaction adviser and expedite the process of consultancy.
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