Vijayawada: At a time when the opposition YSRCP has intensified its campaign against the Public-Private Partnership (PPP) model for medical colleges in the state, the Union government strongly endorsed the approach, urging the state to extensively leverage PPP opportunities in the healthcare sector.

In a detailed letter to Andhra Pradesh health minister Y Satya Kumar Yadav, Union health minister J P Nadda underlined that PPP has played a crucial role in expanding infrastructure across sectors since 2000 and holds similar transformative potential for healthcare. The letter, along with a five-page policy note, outlines the financial, operational and service-quality benefits of adopting PPPs for medical colleges, hospitals and allied health infrastructure. The Centre highlighted substantial financial support through the Viability Gap Funding (VGF) scheme. For healthcare projects, up to 60 per cent of the total project cost is eligible for VGF support. In pilot projects, this assistance can go up to 80 per cent of the project cost, while 50 per cent of operational expenditure for the first five years is also covered.

The VGF burden is shared equally by the Centre and the States, effectively translating into 30–40 per cent direct Central support for PPP healthcare projects.

According to a release by the state medical and health department, Union minister Nadda detailed seven key advantages of the PPP model, including rapid expansion of health infrastructure, improved quality of services, access to private-sector expertise and innovation, efficient use of existing assets, sharing of risks, enhanced transparency and accountability, and faster delivery of quality care to patients.

Citing national experience, the Centre noted that PPPs are already operational in areas such as medical colleges, hospital development, diagnostics, mobile medical units and dialysis services.

So far, projects worth about Rs 2,000 crore have been approved under the VGF scheme, with 919 dialysis centres functioning in 20 states under the PPP model.

The letter also recalled that the Union Budget 2025-26 encouraged states to prepare a three-year pipeline of PPP projects, especially to meet the rising demand for medical education, hospital modernisation, technology-driven solutions, tele-radiology, diagnostics and data-based decision-making.

To effectively harness these opportunities, the Centre advised Andhra Pradesh to set up a dedicated PPP cell for healthcare to plan projects and coordinate with the Union government.

In his response, health minister Satya Kumar Yadav thanked the Union minister for the guidance and sought Central assistance for the coalition government’s plan to develop 10 medical colleges in the state under the PPP model, asserting that such initiatives are aimed at strengthening public healthcare capacity despite opposition criticism.