JEDDAH, 13 April 2006 — A new health service company has been established at the initiative of Prince Sultan Charitable Foundation to carry out a number of projects, including hospitals and medical colleges and universities to meet requirements of the Kingdom’s growing population.
Majed Al-Qassabi, secretary-general of the foundation and chairman of the company’s board, said the Commerce and Industry Minister Hashim Yamani has already licensed the new company, which will offer 30 percent of its shares for public subscription.
“The strength of the company lies in the cumulative experience of its founders in the health sector,” said Al-Qassabi, adding that the company was established to meet the growing investment requirements in medical and health sectors.
Apart from Sultan Foundation, the founders include Medical Treatment Group, Marae Bin Mahfouz Group & Partners and Arabian Health Investment Company in addition to prominent businessmen like Muhammad Hassan Sharbatli and Muhammad Al-Bishri.
The company has been licensed to carry out a variety of activities. They include building, ownership and furnishing of hospitals, polyclinics, health units, pharmacies, medical labs and recuperation homes and operation, management and maintenance of hospitals.
It is also mandated to extending specialized medical consultancy and treatment services, wholesale and retail trading in medical equipment and medicines, establishment of medical universities, providing technical solutions, investments in all medical fields.
Abdullah Bin Mahfouz, a member of the board, said the establishment of the company came at a time when the government was seeking greater private sector participation in the development process and service projects.
The Seventh Five-Year Development Plan (2005-2010) has estimated government spending in the health sector at SR98 billion to finance new hospitals and health centers as well as to expand the existing health facilities across the country.
“This huge public spending offers the private sector an opportunity to participate in investment projects in the health sector as a principal partner,” he pointed out. He also referred to growing health requirements in the Kingdom as a result of increase in population.
Chronic diseases such as cardiac problems, cancer and diabetics demand specialized medical treatment, Bin Mahfouz said while speaking about the company’s feasibility. The increasing number of people injured in road accidents also requires advanced health care, he added.
He said the private sector has made tremendous achievements in the sector during the past years.
Total beds at private hospitals now account for 19 percent of the total while doctors working there represent 30 percent of the total doctors in the country.
At present there are 105 private hospitals with 9,337 beds, 1.059 polyclinics, 795 medical clinics, 59 medical labs, 12 naturopathic treatment centers, 3,228 pharmacies, 286 medicine warehouses, 9,929 doctors and 13,848 nurses.
The government had previously licensed another company named National Company for Medical Care. “The decision to set up the company is part of the state’s policy to broaden the economic base and encourage the private sector to play an effective role in promoting economic development,” the Commerce Ministry said.
The Riyadh-based company, with a capital of SR300 million, was licensed to establish, own, furnish, operate, manage and maintain hospitals and other health facilities. “It can also engage in wholesale and retail trade of medical equipment and own vehicles equipped with medical facilities,” the ministry said.
The formation of the two companies comes in the wake of a government plan to privatize state-owned hospitals. The new executive bylaw issued by the Health Ministry allows the government to sell and rent some of its hospitals to private investors.
The privatization “can be carried out either by selling a hospital or renting it to a private investor or a company or changing it to a corporation owned by the state and run on a commercial basis,” the law said. However, the law insists that privatization should not disrupt public health services, reduce the quality of services or make them prohibitively expensive.
