Netcare begins handover of hospital and clinics to Lesotho after partnership collapses

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Netcare and the government agreed that the transfer of assets, equipment and stock would be overseen by an independent external auditor.
Netcare and the government agreed that the transfer of assets, equipment and stock would be overseen by an independent external auditor.
James Stent, GroundUp

Private hospital group Netcare said on Wednesday it has started handing over operations of the Queen Mamohato Memorial Hospital and four of its clinics in Maseru to the Lesotho government.

This follows a collapse of a partnership between the government and the Tšepong consortium that Netcare has a 40% stake in.

The government said the partnership, with was in its 13th year of an 18-year contract, would be terminated after it accusing Tšepong of noncompliance. Netcare, however, alleges that the state missed payments for services it was provided with.

"The GoL [government of Lesotho] has repeatedly reiterated that it has no intention of making these scheduled, contractual payments at this stage, and will only consider making payment after the PPP [public-private partnership] termination date of 31 August 2021," Netcare said.  

"In light of these circumstances, Netcare is no longer prepared to fund ongoing operations on behalf of the PPP… The refusal by the GoL to pay the outstanding fees clearly places an unreasonable expectation on suppliers to continue providing full services at a substantial level of commercial risk to their businesses."

Netcare and the government agreed that the transfer of assets, equipment and stock would be overseen by an independent external auditor.

It said media reports that it had already withdrawn from the hospital and the clinics were "factually incorrect". It said only property belonging to Netcare, which was not part of providing patient care, had been removed.

Netcare CEO Dr Richard Friedland said in the statement that the "care of patients will not be compromised".

"In financial terms, the contribution from the Lesotho PPP is not material to the Netcare Group’s earnings and there is no impact on any other parts of the Netcare business. Netcare will be handing over the hospital and the primary care clinics to the GoL as fully operational facilities," Friedland said.

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