Forex changes put city hospital projects under risk

ANKARA / LONDON

AFP Photo

The biggest risk that may block the construction of the planned 34 city hospitals across Turkey is the loss in the Turkish Lira’s value, said the Health Ministry in a booklet to be distributed to the members of parliament.

The lira is down around 5 percent against the U.S. dollar this year, one of the worst performances among developing countries.

A total of 34 city hospitals are planned to be built for around 30 billion liras ($12.2 billion). For 16 of the planned hospitals, deals have already signed for a total of 17 billion liras of investment.

The investment period for the hospitals is calculated at three years and the operation period 25 years.
Following this time frame, the hospitals will be transferred to the Health Ministry.

Investors need to undertake the projects’ 20 percent of financing by their own equity, and the remaining 80 percent by bank loans or other means, in line with the Public Private Partnership (PPP) model.

The ministry said the cost advantage in such projects may rise up to 46 percent.

Meanwhile, with a population of 420 million, Eastern Europe is swiftly gaining momentum as a key area for private and public investment in healthcare and health services, according to a new Frost & Sullivan analysis released Feb. 17.

The report, titled “Eastern Europe Healthcare Outlook 2014,” sheds light on the changing healthcare dynamics in the region, saying with the number of hospitals reaching nearly 15,000 units; healthcare spending has been growing from $260 billion of 2010 to an additional 13 percent in 2013. The percentage of private healthcare spending has also seen growth of an additional 6 percent from 44 percent of 2010 in 16 countries in the region, among which are Turkey, Russia, Kazakhstan, Greece, Bulgaria and the CIS countries.