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While a proposed Rs 200 crore project in Patna would not be materialised now, two other projects scheduled to be commissioned in FY18 would be now operational by FY19, according to company reports.
The hospital chain, in January 2013, announced its plans to come out with Apollo Proton Therapy Centre, a first of its kind across South East Asia, Africa and Australia and entered into a contract with Belium-based IBA (Ion Beam Applications S A) for the equipment and services supplied including the long-term operation and maintenance contract. The facility, which was earlier expected to be launched by FY18, will now be opened by FY19 due to the delay in getting clearance from the Atomic Energy Regulatory Board (AERB) , said the company sources.
"We had a delay in getting the AERB approval, which we only received last quarter. Having received the AERB approval we have already gone ahead and started developing the site, because the site also required an AERB approval before we started construction," Krishnan Akhileswaran, chief financial officer, AHEL told Analysts recently.
"We couldn't have started construction before their approval. The construction will take another 18 months and after that the installation and testing take another one year, which is why it has gone into FY19," he added. The centre would also have around 150-200 beds over and above the proton therapy facility, he added.
Till the quarter ended March 31, 2015, the company's document says that it's expected date of completion FY18. The proton therapy, which is expected to arrest cancer cells focusing precisely into the affected area without harming tissues nearby, is useful to treat paediatric patients, and treatment of varieties of cancer of particular nature, like the eye or brain cancer. There are around 30 lakh cancer patients in India and 10 lakh new cases are detected every year, added the hospital management during the time.
Meanwhile, the proposed super speciality facility in Patna with a 240 bed capacity, which was also expected to be completed by FY18 would not be materialising for the time being, since the company did not get the land in bidding.
"We bid for the land and we were very much engaged in studying Patna, but unfortunately our bid was lowest, with someone paid much higher premium and got that piece of land. We will be on the lookout for sites at Patna, but we definitely cannot buy something at market price," said Suneeta Reddy, managing director of AHEL.
Two other super speciality projects - a 175 bed project in South Chennai and a 300 bed project in Byculla, Mumbai - are also expected to see completion in FY19, compared to the earlier plan of completion in FY18.
"Delay in completion of projects is good in a way. If you look at from our perspective, we have far too many hospitals now that we have added, we need to consolidate and ensure all of them become profitable in the next two years. It (delay) gives us time; breather in our fast growth," Akhileswaran told Business Standard.
It is expected to add 875 beds in three locations in FY16 and during FY19 another 475 beds.
The company would require Rs 750 crore to complete the projects and most of that would come from the proposed rights issue for the same amount, it has planned for this year. "You will see that we will use that to pay down our debt initially, which should bring down the interest cost. Then we will go back picking up more debt as we require," he told Analysts. A major share of the capex would be done in FY16.
