Johannesburg – While hospital group Netcare [JSE:NTC] expands its foothold in the UK and local markets, the Lesotho project will determine whether it will pursue its public private partnership model elsewhere in Africa.
"We are very keen on private public partnerships," said Netcare CEO Richard Friedland. "We've been talking to governments and they are showing interest."
Netcare entered into an agreement with the Lesotho government and other parties in 2008 to build and operate a new hospital and refurbish three clinics.
The refurbishment is almost complete, with one clinic already in operation. The other two clinics will be officially opened on May 28 this year, while the hospital is expected to be opened in July 2011.
"Everybody is waiting to see what will happen with those partnerships," said Friedland. "Once we've demonstrated success, hopefully the floodgates will open."
An analyst said while the UK and South Africa remain Netcare's cash cow, public private partnerships are not a bad strategy to enter African markets amid stringent regulations.
Presenting the interim results, Friedland also said Netcare's board has approved the request to increase 2010's capital expenditure from R800m to R950m. The bulk of that amount will go towards the 132-bed Waterfall Hospital currently under construction in Midrand, and new beds to be added in existing hospitals.
Friedland described the investments as a "vote of confidence" in the South African healthcare industry.
On the intention of General Healthcare Group (Netcare's UK partner) to list on the London Stock Exchange, Friedland said the partners had decided to delay that decision due to Europe's market uncertainties.