Premier McKeeva Bush has revealed more details of the cost of building Dr. Devi Shetty’s proposed medical tourism hospital as well as concessions and incentives the government granted in the recently signed agreement.

Speaking at a press briefing on Thursday, Mr. Bush said the proposed 2,000-bed hospital was estimated to cost a total of US$2 billion.

He said US$200 million would be spent in the first two years, in the first phase of the project, which involves building a 200-bed hospital, including $110 million on construction, $33 million on labour and the remainder on other areas.

Mr. Bush outlined a plethora of revenues the medical tourism project would generate, based on estimated projections from Mr. Shetty.

“I believe this project is good for this country... that our tourism product is in need of a shot in the arm and I believe this can give it,” Mr. Bush said.

The project is being paid for by Mr. Shetty and a group of investors, most of whom are doctors, the Indian heart surgeon said earlier this month as he outlined his ambitious plan to create a tertiary care hospital, a medical university and an assisted living facility on 500 acres of land in an as-yet undetermined location.

“If he only does a quarter of what he says, then this country will benefit,” Mr. Bush said of Mr. Shetty and his plans.

The premier said more than US$170 million would be derived in duties over the duration of the project and more than US$270 million would be spent on locally purchased materials during construction.

He estimated that more than US$300 million would be paid to local labour during the construction of project over the next 15 years.

Mr. Bush told reporters in that by 2024, more than 2,000 Caymanians would be employed at the centre, which Mr. Shetty has said would include a tertiary care hospital, a medical university and an assisted living home.

Between 2012 and 2024, Caymanians employed by the centre, which will be named the Narayana Cayman University Medical Centre, are slated to earn $800 million of the $4.3 billion which will be paid in salaries to the entire staff.

Mr. Bush said the capital expenditure of the project is expected to be US$1.2 billion on the hospital from 2012 to 2024; US$360 million on the university from 2014 to 2017; and US$400 million on the assisted living facilities from 2016 to 2021.

The government signed a memorandum of understanding with Mr. Shetty on 7 April, agreeing to give concessions on duty for medical equipment and supplies, and on work permits.

However, there will be no import duty concessions on building materials, Mr. Bush said, adding that it was projected that the government would earn US$110 million on duty for those building materials between 2012 and 2024.

Mr. Shetty has said that the hospital will likely be operational by mid-2012 and he hopes to break ground on the project in January next year.

The premier said other industries would also benefit from the construction of the medical tourism centre, with room taxes increasing to US$56 million per annum by 2024 from an expected US$4.4 million in 2013.

He said Cayman Airways would also profit from the project with the airline’s revenue expected to increase by 125 per cent.

The revenue generated from departure tax would increase from US$2.16 million in 2013 to US$10.5 million in 2024, he said.

The local transportation sector would also benefit, with more than US$1 billion expected to be generated in revenue from 2013 to 2024.

He said some 10,000 new rooms would need to be added to hotels’ inventory to accommodate guests accompanying the hospital’s patients at a cost of US$120,000 per room, hence putting an additional US$1.2 billion into the construction industry by 2024, Mr. Bush said.

More apartments would also have to built, he said, at a cost of US$180,000 per unit. “This will add US$270 million in construction spending by 2024,” he said.

Patients and visitors accompanying them would spend more than US$3 billion from 2013 to 2024 on discretionary purchases, such as food and other items, the premier said.

“[There will be an] increased number of tourists, in terms of patients and visitors, by 87,600 for 2013 up to 1,051,000 by 2025. The stay-over levels are under 300,000 right now,” Mr. Bush said.

The restaurant industry would also see benefits, he said, adding that the increase in revenue for eateries was estimated to increase from US$14 million up to US$319 million over 15 years.

Other benefits include Caymanians and residents not having to travel abroad for tertiary medical care and reduced medical costs for locals.

Duty concessions

Mr. Bush explained that under the concessions granted to Mr. Shetty, there would be an exemption of duty of US$160 million of all medical equipment and supplies imported into Grand Cayman. During the 15 years following this, duty waivers not exceeding five per cent of the value of the equipment and supplies would be granted. During the 15 years thereafter, duty would not exceed 10 per cent of the value of medical equipment and supplies.

During the first 50 years, after construction of phase one begins, all life-saving equipment and supplies would be duty free, including heart valves, artificial hearts and other organ replacement equipment and supplies, Mr. Bush explained.

Competition

The agreement gives exclusive rights to Mr. Shetty’s to set up large-scale medical tourism facilities for five years from the date the hospital commences operation.

But Mr. Bush said this clause does not extend to Caymanians, who would retain the right to “establish health care facilities of any kind in the Cayman Islands”.

The government has also agreed to upgrade the airport, give work permit concessions and amend some laws to facilitate the hospital.

Health Minister Mark Scotland said legislation would be amended to extend the number of countries from which medical qualifications would be accepted in Cayman, to allow more nationalities to work here in the medical industry.