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Mar 20, 2009

DBSA commits R700m to first health PPP outside SA

Lesotho’s Health and Social Welfare Minister Dr Mphu Ramatlapeng and Development Bank of Southern Africa’s Tadesse Admassu discuss the new public referral hospital and refurbishment of existing clinics in Lesotho.Video editor: Darlene Creamer.
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The first health public-private partnership (PPP) project outside South Africa is on track to begin next week with the construction of a new public hospital in Lesotho.

The Development Bank of Southern Africa (DBSA) signed loan agreements of about R700-million with Tsepong, a consortium led by Netcare to construct, upgrade and operate the new public referral hospital and refurbish the existing filter clinics, on behalf of the Lesotho government.

DBSA international division executive vice-president Tadesse Admassu told Engineering News Online, on Friday, that the DBSA is excited to raise the level of fixed capital formation infrastructure development.

"While this is our mandate, it is also is an area that has a great deal of backlogs across various sectors in the whole region, of which, one is healthcare. Healthcare is a special sector, as it does not always lend itself to these types of investments. Healthcare is always financed straight out of public finance, or budget sources. What is special about this project is that government and private sector have come together to invest in a significant rehabilitation project," he said.

Lesotho's Ministry of Finance and Development Planning principal secretary Mosito Khethisa says that his government is investing R400-million in the project.

"The key issue is the leverage effect. We always know that governments have limited capacity and for a government to be able to bring in twice as much as they are putting in-this is quite a feat. We talk about raising the levels of investment in the economy, particularly in the productive or mining sectors, or the extractive industries generally - these are good for the economy, but do not always support the social development in the same way that a healthcare or an education project can," says Admassu.

Admassu also told Engineering News that this type of investment has not been made in decades. "It is not the kind of project that is easily done - so, it is complex and large, and in a sector that has a high developmental impact."

Minister of Health and Social Welfare Dr Mphu Ramatlapeng said that the PPP hospital was a critical step to improving health services and results for the nation.

Ramatlapeng said that there would be strict reporting and monitoring procedures in place on a daily, monthly, quarterly and yearly basis to ensure that government can hold Tsepong accountable.

"The specification of standards, set budgets, expected results, strict management and accountability is often lacking in traditional government projects and this is what differentiates this project from others. By providing both affordable and excellent facilities, management services and training, this public hospital will provide an example for other hospitals in Lesotho, and indeed, other public hospitals in Africa," she added.

The new hospital will provide a wide range of services, highly trained staff and specialised medical equipment, while serving as the national primary clinical and training facility for health professionals.

Thirty-five private beds will be colocated with the State beds in the same facility, with private specialists visiting and consulting from Bloemfontein.

The construction of the new hospital is expected to be completed in mid-2011, and the clinics later this year.

Currently, 40% of the shares in Tsepong are held by Basotho businesses, and this will increase to 55% during the project term.

‘The government of Lesotho is committed to growing the private sector and sustainable economic development. This project is an important part of growing our economy," said Ramatlapeng.


Edited by: Creamer Media Reporter
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