Mumbai cancer hospital PPP gets cold reception

A pioneering Indian public-private partnership (PPP) in the healthcare sector for a cancer hospital in southern Mumbai drew no bids from the private sector. The government body responsible for the project, the Municipal Corporation of Greater Mumbai (BMC), is now revising the tender offer for the hospital, according to local media reports.

The PPP offer was a first of its kind in India, as BMC planned to get private sector support for a 75- to 100-bed hospital close to a maternity hospital. The hospital was supposed to be designed in a way that could keep the cost of cancer treatment low, but according to a BMC spokeswoman, the size of the PPP project had not quite been determined.

The government said that all private bidders were welcome. However, the conditions for bidding may have been too stringent to attract private sector interest, and the government body is currently considering relaxing those conditions slightly.

“We had invited bidders and were to have a pre-bid meeting earlier this month, but no one came forward. We are identifying which of the conditions may have led to this,” additional municipal commissioner Manisha Mhaiskar, who is in charge of the civic public health department, told The Indian Express. He added that the BMC should come out with a new proposal by the end of the month.

Local Indian media suggested that some bad experiences with the private sector recently may have pushed the Mumbai government to be too cautious with the PPP offer. The BMC first initiated a private partnership three years ago for the construction of specialty hospital SevenHills, for which an unnamed private partner borrowed INR 9 billion (€101 million; $136 million) to build a 1,500-bed hospital.

However, the private company did not keep the charges for beds and medicine as “affordable” as the BMC had required as part of the PPP. The BMC claims that SevenHills has not reserved 20 percent of its beds for low-income groups, and consequently the government body has been locked in legal dispute over the PPP project for two years now.

“We have a bank of experience after dealing with SevenHills Hospital. We have ensured there is no repeat of it in the tender contract,” Mhaiskar had told The Indian Express earlier.

The cancer hospital is only the most recent victim of India’s infrastructure challenges. Earlier this month, the ambitious INR 96 billion Mumbai TransHarbour Link road project also received no bids, even after the deadline was extended twice. 

Throughout the year, many other PPP projects and infrastructure initiatives have also been delayed or received little interest in India, and local media reports are starting to blame “strict tender norms”.