Despite Vietnamese state-owned companies withdrawing funding from projects outside of their core business, the $20 million expansion of the Vietnamese-backed Cho Ray Phnom Penh Hospital remains on track, the hospital’s head said yesterday.

In July 2012 the Vietnamese government requested that state-owned enterprises withdraw investment in non-core business fields prior to 2015. Reports from Vietnamese media last week cited Cho Ray Phnom Penh Hospital as a project to be affected by the funding curbs.

The hospital’s key investor, Ho Chi Minh City Medical Investment Joint Stock Company (MECO), is under funding pressure from its shareholder companies whose main business interests lay outside of health investment, according to an April 28 report from the Saigon Times.

Nguyen Hoang Nam, general director of Cho Ray Phnom Penh told the Post yesterday that he met with both MECO and local investor Sokimex last week and was advised that the second phase of development, which will see the hospital grow by an additional 300 beds, would be fully funded.

“The plan is still the same, nothing has changed,” Hoang Nam said.

“Both partners have agreed that we will start the second phase.”

Tran Manh Tiep, Second Secretary at the Vietnamese Embassy confirmed his governments investment directive on Monday, but declined to comment on the extent to which the order would impact Cambodian projects.

“Here is the problem to be solved,” he said in an email.

With an initial investment of $42 million, construction of Cho Ray Hospital commenced in 2010 and began operating in January this year with 200 beds.

Commencement of the second phase of the project to expand to 500 beds is expected to be announced shortly, the hospital’s general director said yesterday.