Turkey seeks to boost healthcare with new investment rules

Fri Feb 22, 2013 10:22am EST

* New rules aim to cut red tape, boost investment

* Healthcare, education eyed by private equity investors

* New city hospitals in the pipeline

By Ozge Ozbilgin

ANKARA, Feb 22 (Reuters) - Turkey has passed new regulations aimed at making private investment in its healthcare sector easier, a move which officials hope could unlock billions of dollars of investment over the next few years.

Turkey's private healthcare sector is growing rapidly, with more people taking out private health insurance and long waiting times at state hospitals, but the lack of a clear regulatory framework has been a barrier to foreign investment.

Private equity investors favour Turkey's fast growing services industries, including healthcare and education, drawn by a near tripling in nominal per capita GDP over the past decade and its young population of 75 million.

Under the new law on public-private partnerships (PPP), passed by parliament late on Thursday, the state will rent city hospitals built and run by the private sector for 25 years.

The new rules aim to cut red tape and pave the way for government guarantees for international project financing investments of 500 million lira ($279 million) and above.

"The regulation will have a positive impact on the sector as it will remove delays caused by the previous rules and reduce the number of permissions needed," said Tunc Duygun, PPP coordinator for the YDA Insaat construction firm.

"Most importantly, the foreign investor will feel more secure," said Duygun, whose company won four tenders to build city hospitals with its Italian partner, privately-held Inso Sistemi Per Le Infrastrutture.

Three Turkish hospitals are currently under construction under a PPP framework, while six are in the contract stage, seven in final bids stage and two still awaiting pre-qualification applications. The projects are expected to add 28,000 beds to Turkey's existing 200,000-bed capacity.

The new rules aim to speed up the tender process.

"The world will have a different view of Turkish projects once these regulations are in place," said another executive from a private company working in the healthcare sector.

The three hospitals under construction include two in the capital Ankara - one being built by a joint venture of Turkey's IC Ictas and Dia Holding, the other by Italy's Astaldi and Turkerler - and one in the central city of Kayseri, being built by YDA Insaat and Inso Sistemi.

(Writing by Ece Toksabay; Editing by Nick Tattersall)

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