An Oncology centre inside the premises of Saint Paul Millennium Medical College is afoot as a French consultant finishes a feasibility study for the Public Private Partnership (PPP).

Under Abebe Gerbrehiwot, experts at the PPP Directorate Office, are currently reviewing the study conducted by a team of consultants from the Expertise Francaise for the past two years financed by the French government.

The Directorate functions under the Ministry, accountable to a nine-member board chaired by Minister of Finance Ahmed Shide and mandated to approve projects, including feasibility studies and major amendments to project agreements, as well as approving bids and negotiation outcomes.

It comprises Alemu Sime, Minister of Transport & Logistics; Mamo Mihretu, Governor of the National Bank of Ethiopia; Habtamu Itefa (PhD), Minister of Water & Energy; Chaltu Sani, Minister of Urban & infrastructure; Fitsum Assefa (PhD), Minister of Planning & Development, Binalf Andualem, Minister of Peace and private sector represented by Ethiopian Chamber of Commerce & Sectoral Association.

The Board’s venture into health comes four years after a law that governs public-private partnerships – the first of its kind – was legislated by Parliament. It came following a two-year feasibility study backed by the government, the African Development Bank (AfDB), and the United Kingdom’s Department for International Development (DfID).

Officials hope the scheme can fill a wide investment gap in the health sector.

Saint Paul Medical College is poised for the budget appropriation of 1.8 billion Br for the current fiscal year. According to Sisay Sirgu (MD), head of the medical college, the move aims to improve the college's human resources and financial models.

He said the private sector participation would seal gaps observed in service and medicine accessibility to patients and the provision of skilled human resources. The officials estimate that it will take up to 10 years for a return on investment and another 10 years for profit.

According to Abebe, a huge investment is required with an estimated initial capital of nearly 28 million dollars while annual operational costs take up to 20 million dollars. He indicated that they are trying to figure out the risk-sharing mechanisms between the private sector and government and the balance between financial profit and public service.

"It's too large and too complex," he said.

He said they plan to partner with developers such as the African Development Bank (AfDB) which will participate in giving transaction advisory services, finding funders and preparing tender documents once the board has approved the feasibility study.

Erected on 6,800sqm land, the nine-storey oncology centre will comprise nearly 340 beds, having the capacity to treat up to half a million patients annually. It is comprised of six surgical rooms, and radiation and nuclear energy treatments and can provide chemotherapy to 500 patients on a weekly basis.

Even though the oncology centre construction was slated to end in September, the rise in the cost of raw materials due to inflation pushed it till the end of January. The cost is predicted to be slashed when half the patients receive medical services through community-based Health Insurance while 10pc will receive medical care through premiums and  40pc in private.

Officials hope the public-private scheme can fill a wide investment gap in the health sector.