CAIRO: Public-private partnerships are increasingly emerging as a model for financing and managing healthcare delivery in the Middle East, according to a recent report launched by Pricewaterhouse Coopers (PwC) Health Research Institute.
While PPP initiatives have been widely and successfully used by Western governments in the past few decades, it is growing in popularity across various sectors and countries in the Middle East.
Evidence that this trend will only continue to grow and expand in the region is shown through developments in the Middle East.
The report, “Build and Beyond: The (r)evolution of healthcare PPPs,” follows the advancement of PPPs from a system used mainly for infrastructure finance to a more modernized solution for larger problems in healthcare service delivery and wellness.
Governments have already shown to be saving as much as 25 percent of healthcare costs with health PPPs, the report says.
With evidence of international interest in healthcare PPPs increasing, the report also predicts that the market is situated to see a rapid growth over the next 10 years.
“The motivation to use PPPs varies widely across the region. As in other parts of the world, some countries are drawn to PPPs by financial and risk transfer considerations,” said Simon Leary, partner at PwC, in the report.
“But the main reason we are seeing more use of PPPs in the Middle East is the access they bring to the acquisition and transfer of skills, global and private sector intellectual property in content and process terms, and clinical and management leadership.”
Last year, Egypt took on its first PPP venture with the Ministry of Finance announcing that a wastewater facility will be constructed on the outskirts of Cairo with investment costs ranging upwards to $200 million. The project is expected to be finished by 2012.
A law was also passed last year in Egypt to regulate PPPs in which the legislation permitted the private sector to construct and operate infrastructure projects as well as bearing the burden of infrastructure’s heavy cost while the government provides periodic funding.
While the PPP program already saw contracts being awarded before the law through the Tenders and Auctions Law, the new law was said to increase the efficiency of projects being implemented.
According to CI Capital, an investment bank in Egypt, PPP projects are continuing to be the focus of the Egyptian government with the purpose of ensuring a sustainable economic growth by offering more job opportunities that will in hope lessen unemployment that is plaguing the country.
The transport sector is predicted to be one of the focal sectors to benefit from a strong potential in PPP projects with a recent announcement of 622 km of new roads at a cost of an estimated LE 1.5 billion during the 2010/11 fiscal year, CI Capital said.
There are also a number of various other projects currently pending, including LE 930 million for housing, LE 684 million for electricity, LE 353 million for services and LE 61 million for the agricultural sector as well as LE 23 million for the administrative sectors.
It has also been reported that seven PPP projects are being planned on the Upper Egypt-Red Sea road with an investment cost ranging from LE 16-20 billion. The top projects are said to be mining, cement and ports, according to the firm.
