Chandigarh, October 26
With the UT adviser, Pradip Mehra, raising strong objections to the proposed move of the high-profile Medicity Committee, headed by the administrator, Gen S.F Rodrigues (retd), to fix Rs 203.70 crore as the reserve upfront project fee price for 45 acres of prime land, valued at about Rs 2000 crore, in the IT park area, questions are once again being raised about the modalities of the latter's 'pet' healthcare project.

The objections have literally led to a 'crisis' of relationship between the two top functionaries, with the administrator not only debunking the adviser's comments but also dubbing them as "motivated" and not based on any "reasoned, balanced and analytical considerations".

Commenting on the minutes of the July 26 meeting of the committee where the issue of the upfront project fee was discussed at length, Mehra has recorded (documents available with The Tribune) that the reserve price should be a "true reflection" of the cost of urban land in the city. Saying the committee's evaluation of the land at Rs 1358 crore was on the "lower side", the adviser noted that the price should be close to Rs 2000 crore. He has also objected to the calculations of the land cost on institutional rates on grounds that dental, nursing and medical colleges were big commercial ventures. He has maintained that any attempt to evaluate the land lesser than Rs 2000 crore will open the administration to criticism of having "sold the crown jewels".

Mehra has also taken objections to the 'unique" revenue model of the project (time and again mentioned on file as the administrator's vision) being pushed by the committee. The main reasoning behind Rodrigues's support for such a model is that he feels that other "money- spinning" methods will not work since the revenue collected will have to be deposited into the Consolidated Fund of India.

Broadly speaking, the model suggested by the administrator can be summed up as the licence fee plus percentage shares plus social commitment. This means that besides the licence fee, the administration would charge 5 per cent of income from students' fee in the medical and dental colleges to be set up in the Medicity and 5 per cent of the profits generated by the superspeciality hospitals. As for the "social commitment", the Medicity licensee will train 300 nurses and provide 100 terminally ill patients palliative care free of cost every year.

Sounds good but Mehra feels that "altruism and profit motive are uncomfortable bedfellows" and hence the model will not work. While quoting PGI director K. K Talwar, Mehra states, "nowhere was there a successful example of a hospital set up in the private sector on land given at concessional rates, meant partly for service of the poor". He says that Dr Talwar had mentioned the case of Apollo Hospital in Delhi, where despite incorporation of specific conditions in the MoU and having the chief secretary as the chairman, the government had failed to achieve its objective of bringing quality healthcare to the poor.

Mehra has suggested that the administration should instead, charge 25 per cent of the tendered amount on the day of the acceptance of the tender and give a moratorium on the remaining 75 per cent payment for a period of five years to facilitate the construction and operation of the project. The balance can be subsequently charged in three equal instalments in the sixth, seventh and eighth year, respectively, he says.

The adviser has also suggested that the project should be divided into smaller units, as this, besides saving the "administration the torture of pegging a base price", may result in higher revenues with smaller plots attracting more premium than the huge chunk of 45 acres. He says this will also address the administrator's concerns of the revenue going to the Consolidated Fund of India.

In his noting, the adviser has also mentioned the contentious issue of the low land acquisition rates being given by the administration. In this connection, he has also placed on record a letter of local MP Pawan Bansal. The administrator has even taken objection to it on grounds that the thrust of Bansal's letter is to increase the compensation to "farmhouse owners" on the basis of incorrect inputs.

To be concluded