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Greenfield Hospital Project Runs into Trouble

The municipal corporation’s ambitious 400-bed Greenfield Hospital at Gadakana has run into hurdles in its execution phase. The project to be executed in public-private-partnership mode was finalized on April 7, which is observed as World Health Day, last year. Hyderbad-based Krishna Institute of Medical Sciences had evinced interest in executing the project. The project was scheduled for completion in two years’ time. However, soon after the Bhubaneswar Municipal Corporation (BMC) and the promoter inked the deal to carry out the project, the latter encountered problems in availing loan for it. The promoters say as the land belongs to the BMC, it could not be mortgaged to get loan. An official said that since the project land and building could not be given as security towards loan, the executor has requested the government to create project land and building assets, which could be mortgaged.

“The government considering whether land and building can be provided to the promoters as security for availing loan. Several other projects and executors are also facing similar problems and the urban development department is trying to resolve the issues,” said Mayor Ananta Narayan Jena. If the issue of getting loan can be resolved, there is another problem that the project faces. The promoter has informed the government that it would not be possible to provide free healthcare services to people below poverty line people. This, the promoter said, would entail a heavy financial burden on it. According to the agreement, 45 percent of the bed will be for people belonging to the economically weaker sections of society. Sources said that the housing and urban development department had called a high-level meeting to come up with solutions. “We have called on the departments to sit and discuss the issues,” said an official of the urban development department.

Official sources hinted that if the promoters insisted on not providing free services to economically weaker sections, the option to terminate the contract would be explored. The delay in implementing the project has pushed up its estimated cost from ₹200 crore to ₹255 crore. “The promoter has formed a special purpose vehicle for execution of the hospital project, but with the passage of time a number of problems have cropped up. The deadline for the project is April next year. The promoter will be penalized if it misses the deadline,” said a senior civic body official. This is not the first time that the hospital project has faced problems. In 2016, the civic body had struck a deal with a Calcutta firm, but it had to be cancelled. – Telegraph India