Few State-owned hospitals eager for subsidized loans

April 4, 2009

LookAtVietnam – HCMC authorities have set aside VND5 trillion to subsidize domestic investment projects, including health care projects, but the HCMC Health Department reported that few hospitals are eager for the fund.

HCM City’s State-owned hospitals have registered VND432 billion for health care project implementation.

Nguyen Van Chau, department director, said at a meeting on the topic on Tuesday that the city’s State-owned hospitals have registered VND432 billion for health care project implementation. Meanwhile, supporting funds for the health care sector could be higher than expected.

According to Chau, it is a good chance for the health care sector because the fund is higher than the normal VND100-200 billion annual allotment.

“Hospitals should know that subsidized loans are an effective investment method with an aim to develop hospitals long term because the risk is not high when the State guarantees the fund,” he said.

The department said a subsidized loan is safe with no interest and terms up to seven years. Hospital owners have the right to decide the hospital fee for projects which use subsidized loans. In addition, they have the right to take funds from health care service and administration for loan payments.

“We encourage State-owned hospitals to complete investment proposals for fund registration. However, hospitals are not eager,” Chau said.

At the meeting, many hospital delegates complained about obstacles. Nguyen Chan Hung, director of Binh Dan Hospital, said that his hospital was considering the loan because they could not find funds for project formulation.

“We are thinking of buying new medical equipment because our hospital is too narrow but we cannot find space for it,” he added.

Do Hoang Giao, director of Gia Dinh Hospital, complained about the legal framework for subsidized loans.

According to Giao, regulations on construction investment procedures, project evaluation and bidding are not clear.

Giao also complained that his hospital did not receive help from the city’s departments of Planning and Investment, and Health for project planning.

In 2000, the hospital received funding from relevant agencies for project planning. Since 2006, departments have not helped hospitals with project formulation.

Giao suggested that the Health Department support hospitals in subsidized loan registration.

Meanwhile, Tran Thach Son, director of Hung Vuong Hospital, showed his worry about repaying the loan.

“If our project doesn’t work effectively we cannot recall the investment. Thus, we have to take from salary funds to pay the loan and it would impact doctors and health workers’ income,” Son noted.

According to Son, although subsidized loans offer preferential policies, hospitals should think carefully before deciding to borrow.

Health care projects for upgrading, refurbishing, waste treatment and medical equipment will be approved for a loan.

In 2008, the city spent about VND111 billion on 91 health care projects, 67 of them construction projects. The disbursement rate reached 70% in January.



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