The Indian government is set to introduce a pioneering initiative to establish public-private partnership (PPP) speciality hospitals to provide affordable healthcare in four underserved districts of Odisha.
The Financial Express reported that these facilities will be supported by viability gap funding (VGF), a financial mechanism where private entities contribute investment and manage hospital operations.
India's Union Finance Ministry recently approved VGF for establishing affordable 100-bed and 200-bed healthcare facilities in Angul, Barbil, Bhadrak and Jharsuguda.
These hospitals will be constructed under a design, build, finance, operate and transfer (DBFOT) model and are expected to begin operations by December 2026.
The concessionaires will manage these hospitals for 32 years, with the option to extend their managerial period.
The total project cost of Rs3.54bn ($42.7m) was determined through competitive bidding.
The VGF for capital expenditures will be shared between the central government and the state government, while the remaining funds will be provided by the private concessionaire.
A senior Indian official said: “With adequate VGF support, successful PPP healthcare projects at these locations could be demonstrated. The model may be replicated in other districts of Odisha and other states.”
These projects have received significant support and guidance from India's Department of Economic Affairs and NITI Aayog, a government agency that works to catalyse economic development in the country.
Global real estate consultant Knight Frank has highlighted India's need for an additional 2.4 million hospital beds to achieve the recommended ratio of three beds for every 1,000 people.
The country's bed-to-population ratio currently stands at 1.3 for every 1,000 people.
The central government plans to build at least one major hospital in each of India's 761 districts to improve healthcare access in smaller towns.
According to a government report, India had a nearly 80% shortage of essential medical professionals in rural community health centres as of March 2022.
