Scrapping of Specialty Hospital

 …Govt to request new line of credit

 By Vahnu Manikchand

The Indian Government has objected to the redirection of funds approved for the construction of a Specialty Hospital here into the upgrade of primary health, insisting that the new government would have to request a new line of credit to carry those plans.

Government recently announced that it was scrapping the multimillion-dollar Specialty Hospital Project and was seeking India’s approval to redirect the remaining money towards the improvement of the local primary health care sector.

The Specialty Hospital Project has been mired in controversy from its inception. Speaking to Guyana Times on Monday, Finance Minister Winston Jordan explained that during discussions with the Indian High Commissioner to Guyana, Venkatachalam Mahalingham, it was indicated that the approach Government has taken was against the rules and procedures of the Exim Bank of India. “He (Mahalingham) said that we cannot use the funds from the Specialty Hospital Project for any other projects than what it was intended for, even if the project is in the same health sector. So now we have to close that line of credit and make a request for a new one to fund the primary health care improvements, which is of priority for us,” the Finance Minister stated.

Finance Minister Winston Jordan

The previous People’s Progressive Party/Civic Administration had entered into an agreement with the Indian Government to construct the Specialty Hospital, with a line of credit granted by India to the tune of US$18 million. Some US$4 million has been already expended on certain preliminary works. According to Jordan, Government will also have to move to close this US$18 million loan, which means that the US$14 million will be returned to the Indian Government and Guyana will only have a debt of US$4 million. However, the Minister disclosed that Government was yet to close this line of credit as it was still hoping to get the remaining money to fund the improvement of the primary health sector. Nevertheless, the Finance Minister outlined that the Government has commenced designing a proposal and upon completion will formally make a request to the Indian Exim Bank for a new line of credit. “We were assured that once the request is made, it will be given utmost priority,” Jordan added.

In an interview, High Commissioner Mahalingham told Guyana Times that he had not taken a decision on the way forward as yet. The Commissioner noted that he has to consult with his Government on the way forward and has conveyed this to Minister Jordan. “I have asked the Ministry of External Affairs, Government of India, to tell us how we should proceed further, so I’m waiting for that response,” he told this newspaper.

The Specialty Hospital was aimed at catering for complicated surgeries, ranging from heart operations, organ transplants to cosmetic surgery. In 2012, the contract was awarded to India-based company, Surendra Engineering, who was tasked with designing and building the controversial facility.

The current Administration, which was on the Opposition side of the House during the 10th Parliament, had heavily criticised the project. The coalition had even cut the $1.25 billion that was budgeted for the hospital in 2013. The previous Administration had got $34.4 million as supplementary funding for the hospital in the 10th Parliament, and only because in the absence of then coalition Member of Parliament (MP) Volda Lawrence a vote had been taken for the funds.

However, citing instances of alleged fraud and delays, the Donald Ramotar Administration last year announced that it had terminated the contract of Surendra Engineering and subsequently filed a lawsuit against it for failing to honour its obligations. Government is yet to recover close to $1 billion from the company. The previous Administration was also hoping that the hospital would have been a pull factor bringing tourists and overseas-based Guyanese back to Guyana, for “health tourism”. However, the new Government said with the current state of affairs in the health sector, it was better that the construction of the hospital be put on the backburner. “The current thinking is that the monies being spent on the Specialty Hospital are better spent on the primary health care system. We have hospitals that are in need of funding including at the West Demerara Regional Hospital (WDRH) and the hospital at Mabaruma also,” Minister of State, Joseph Harmon.