KOCHI: The government’s attempt to take the annuity route to raise funds for the cancer centre project in Kochi is unlikely to make much headway, given the past experience with such proposals.
“The annuity scheme allows a cash-strapped government to implement projects without an immediate financial burden,” said Dr K N Harilal, economist and former member of the State Planning Board.
“However, the last government found no takers for some of the projects which it wanted to implement through the route.”
The government has opted for the annuity model where the government will in installments reimburse the investor who builds the cancer centre.
This is different from the BOT model and the government wants to reassure that the cancer centre will be operated by government from the start itself. It is estimated that the project will cost around Rs 450 crore.
However, it needs to be seen that how many private investors will come forward to invest in such a project.
“No private investor will forego his returns on the money he invests and it has to be now calculated how much money the government in effect will have to give the investor back in equal installments.
It depends on the period up to which the government extends the repay,” said a business analyst in Kochi adding the overall cost of the project will shoot up in this mode.
“Most of the private investors will be looking for at least 20 percent return on investments,” he said.
Meanwhile members of the Justice V R Krishna Iyer Movement including Justice Iyer submitted a memorandum to KPCC chief V M Sudheeran asking to pressurize the government to build the cancer centre in the government sector itself, rather than allowing it to fall into private hands, when Sudheeran called on Iyer to wish him on 100th birthday.
Sudheeran assured Justice Iyer that he would talk to the Chief Minister and the Health Minister. “I will extend all help in this regard,” he said.
