PPP may rejuvenate schools & hospitals
Private sector may get access to government assets to create new revenue stream, offer value-added services to students and patients.
By Gireesh Chandra Prasad, TNN |
NEW DELHI: This may be finance minister P Chidambaram���s most ambitious exercise to unlock the government���s brand value and channelise private investment to where the country needs it most education and healthcare.
The finance ministry would soon come out with a special scheme to let the private sector run government schools and hospitals, besides setting up new ones.
Extremely attractive norms for public-private partnerships (PPP) in these two sectors are being worked out, sources said. The scheme in healthcare would cover both basic (primary) as well as sophisticated healthcare facilities (tertiary care).
This scheme would allow the private sector to use government assets to create new revenue streams and provide additional and value-added services to students and patients. This will be in addition to the government funds that will be used to provide existing services more efficiently and free-of-cost.
For instance, a private partner running a government hospital will be allowed to start a medical or nursing college to find money to provide better services at the hospital.
Such colleges are likely to be a success since a degree from an institution where the government is a partner would carry more credibility than one issued by a private institute. Similarly, a school having vacant land may be allowed to house a telecom tower to generate resources.
The private partner may also get additional grants from the government to offer value-added services, such as diagnostic support or beds, at a public health centre, where such facilities are not available.
The partner may also be allowed to levy a marginal user charge to introduce new facilities while providing existing facilities free-of-cost.
The scheme would be designed to offer decent returns on investment for the private sector as the government acknowledges that corporate houses can���t be expected to do philanthropy at the national level.
The terms have to be attractive to rope in private sector as a solution to the country���s poor healthcare and education sectors.
Roping in the private sector will also ensure leakages are limited as the private party would be accountable for the funds it receives from the government as well as the amount it raises using state assets.
PPP projects in roads and ports have so far received an enthusiastic response from the industry while it was muted in social sectors like health and education.
The Centre now provides interest-free loans to state governments to prepare viable PPP projects, in addition to meeting a fifth of project cost through a viability gap fund.
The finance ministry would soon come out with a special scheme to let the private sector run government schools and hospitals, besides setting up new ones.
Extremely attractive norms for public-private partnerships (PPP) in these two sectors are being worked out, sources said. The scheme in healthcare would cover both basic (primary) as well as sophisticated healthcare facilities (tertiary care).
This scheme would allow the private sector to use government assets to create new revenue streams and provide additional and value-added services to students and patients. This will be in addition to the government funds that will be used to provide existing services more efficiently and free-of-cost.
For instance, a private partner running a government hospital will be allowed to start a medical or nursing college to find money to provide better services at the hospital.
Such colleges are likely to be a success since a degree from an institution where the government is a partner would carry more credibility than one issued by a private institute. Similarly, a school having vacant land may be allowed to house a telecom tower to generate resources.
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The private partner may also get additional grants from the government to offer value-added services, such as diagnostic support or beds, at a public health centre, where such facilities are not available.
The partner may also be allowed to levy a marginal user charge to introduce new facilities while providing existing facilities free-of-cost.
The scheme would be designed to offer decent returns on investment for the private sector as the government acknowledges that corporate houses can���t be expected to do philanthropy at the national level.
The terms have to be attractive to rope in private sector as a solution to the country���s poor healthcare and education sectors.
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Roping in the private sector will also ensure leakages are limited as the private party would be accountable for the funds it receives from the government as well as the amount it raises using state assets.
PPP projects in roads and ports have so far received an enthusiastic response from the industry while it was muted in social sectors like health and education.
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The Centre now provides interest-free loans to state governments to prepare viable PPP projects, in addition to meeting a fifth of project cost through a viability gap fund.
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