Hospital investor to earn Sh8 billion interest annually

The Committee on the National Economy is currently scrutinising government plans to guarantee a loan of Shillings 1.3 trillion (US$ 379 million) for FINASI, a major member of the FINASI-RoKo consortium, which specializes in the construction of turnkey health care facilities.

Although the project cost is Shillings 1.3 trillion, Shillings 477billion will accrue as interest of a period of 6 years. The loan is coming in form of a promissory note with interest of 6.49 %.

According to the breakdown of the money, the purchase, delivery and installation of medical equipment, hospital furniture, testing, commissioning and training will cost Shillings 370 billion, civil works excluding mobilisation costs Shillings 320 billion, medicines and consumables for a year Shillings 62 billion and preliminary project development Shillings 50 billion.

Early this week, a team of officials led by the State Finance Minister, David Bahati, and Health Ministers, Ruth Aceng and Sarah Opendi begged the committee to endorse the loan, saying the facility will return to Uganda after 8 years.

MPs questioned the high interest rate of loan, saying the estimated interest money could be used to construct another health facility. Herbert Ariko, the Soroti Municipality MP said it is outrageous for Government to borrow for a development project at 6.49 % interest.

He says Government needs to review the agreement with the developer to cut the costs.

Charles Victor Byarugaba, the Budget Advisor Ministry of Finance, said if government had resources, only Shillings 900 billion would be required for the facility.

According to David Bahati, while it is the responsibility of the investor to raise the required funds, it is important to note that the investor will first inject money in the project before government starts paying him.

The proposed hospital will be operated as a world-class accredited facility to treat conditions for which Ugandans have been traveling abroad like  cancer detection and treatment, heart diseases including catheterization, brain and neurosurgery, organ transplant (including kidney, liver), fertility treatment, highly specialized surgeries, and bone marrow transplant (BMT), among others

It will have a 264-bed specialized Healthcare capacity, inclusive of an 80-bed oncology centre, doctors and Nurses school and accommodation, a 9MW powerhouse and the proposed National Ambulance control center.

Construction of the hospital has delayed since 2014 due to challenges of land ownership and fund guarantees. Government is expected to take over the hospital after ten years according to the agreement.

The Chief Executive Officer of FINASI is Ahmed Sultan. The company has reportedly innovated and developed specific know-how in the Healthcare field delivering state of the art facilities and providing solutions and added value services to its clients.

Some of its projects are Sharg Al Nile hospital in Khartoum and Famboni General Hospital in Comoros among others.