The Turkish Republic of Northern Cyprus (TRNC) should look like a good bet for international hospital developers looking for new horizons. It has a well-educated, multi-lingual workforce, which includes a high proportion of medical and surgical staff, an enviably high rate of economic growth compared with most eurozone countries, and a location close to potentially lucrative medical travel sources in the Middle East, Russia and the European Union (EU).

Because of its ambiguous status, EU regulation and legislation does not apply in Northern Cyprus

Yet, despite the ambitions of its several home-grown private sector hospital companies and their partners in nearby Turkey, development in the international hospital sector has not been the success story some have hoped for. Obstacles include a bureaucracy that some sources believe does not do all it could to smooth the way for investors. Governance is another concern.

Because of its ambiguous status, EU regulation and legislation does not apply in Northern Cyprus (as it does south of the 'Green Line' that separates the island's two political entities), so the TNRC is literally a law unto itself and has a reputation for sheltering some shady characters, such as Asil Nadir, the Cypriot-bornmillionaire jailed for fraud in the UK in 2012, who returned tohis native land after release from prison in 2016.

Ongoing discussions

Meanwhile, EU- and US-based hospital companies that might otherwise be tempted to dip a toe in Northern Cypriot waters are reluctant to be seen to be doing business in what the legitimate Republic of Cyprus proclaims an illegal state. The current TRNC government makes the right noises. Tourism minister Fikri Ataoglu claims that the TRNC attaches great importance to medical travel. Earlier this year, Ataoglu spoke of new bilateral co-operation agreements with 'various countries' and said legislation would be implemented 'soon' to develop the sector.

However, there is no real indication that this is more than wishful thinking. Parliamentary elections are due early next year, and with up to a dozen parties in play prime minister Huseyin Ozgurgun's government is more concerned with electioneering than with the small print of legislation aimed at developing private health infrastructure.

Discussions between the Republic of Cyprus and its breakaway neighbour rumbled on through 2016 and 2017, with interventions from interested or neutral parties including the United Nations (UN), EU, Turkey, Greece and Britain. Amicable settlement turned out to be a mirage. Hopes of an end to the rift that opened in 1974 were dashed in July when talks ended without agreement. Each side, predictably, blamed the other for its intransigence. Reunification is now off the table for the foreseeable future, perhaps forever. 

The TRNC must now abandon hopes of joining the EU – with the economic benefits that would bring – and start to plan a different future. Its leaders are now likely to seek wider recognition of the TRNC as a legitimate state, paving the way for inward investment and easing access for visitors. That could make it an attractive investment option for international hospital groups – but only if the TRNC can get its act together.

With a population of 314,000, the TRNC, created after Turkey's invasion of the island in 1974, is recognised only by Turkey, which maintains a significant military presence. The EU recognises the Republic of Cyprus, which joined the EU in 2004, as the only legitimate government of the island and regards the North as Turkish occupied territory to which EU legislation and regulation does not apply.

Northern Cyprus's peculiar status makes it difficult for any except local and mainland Turkish investors to invest in developments such as private hospitals. A further disincentive is the issue of obtaining clear title to real estate, as many of the ethnic Greek Cypriots who were driven out of the North in 1974 maintain claims to property in the TRNC.

In the southern part of the island, the Republic of Cyprus has been actively trying to develop itself as a medical travel destination for some years, admittedly without runaway success despite its membership of the EU and the eurozone, which ease access to European source markets, sources of private investment and EU development funds.

In the North, lack of direct access from potential overseas markets, more limited access to investment funds, and uncertainty over the breakaway state's future status have all held back growth in the international hospitals sector.

Overcoming obstacles

One significant obstacle to growing medical travel is the long-standing international embargo on all direct flights to Northern Cyprus, which forces airlines flying into the North's Ercan International Airport to make a token touchdown in Turkey – the only country which flouts the ban. In June 2017, the UK tightened its rules to insist that all passengers flying between the TRNC and Britain must disembark and undergo luggage screening in Turkey en route.

Since 2004, it has become easier for visitors to enter Northern Cyprus from the Republic of Cyprus. With seven border crossing points now open and streamlined border procedures between North and South, it is relatively easy to travel from the UK, Germany and other EU countries to Northern Cyprus using flights to Larnaca in the Republic of Cyprus, with land transfer to Girne (Kyrenia) typically taking around 90 minutes. However, such travel could be limited or banned at the whim of either government.     

There are already signs that some Turkish hospital groups see the TRNC as a new frontier, not least because state healthcare provision is struggling to cope with the needs of a growing population

Now that reunification is no longer a realistic goal, Northern Cyprus may be drawn into an even closer political and economic relationship with Turkey, where hospital development by entities like Acibadem Hospitals Group, (majority-owned by the giant Malaysian-Singaporean group IHH Healthcare) and Medical Park International have expanded rapidly. Turkey has more than 40 Joint Commission International (JCI)-accredited hospitals, according to the Turkish Association of Private Hospitals and Health Institutions (OHSAD).

According to some sources, the supply of hospital services in Turkey now exceeds demand. That may have prompted Acibadem's announcement last year of plans to acquire Bulgaria's largest private hospital and expand into Russia and Romania. There are already signs that some Turkish hospital groups see the TRNC as a new frontier, not least because state healthcare provision is struggling to cope with the needs of a growing population. Doctors and other health workers have warned of staff shortages at hospitals such as Girne's Akcicek state hospital. In June, doctors called a 'lightning strike' in protest at staff shortages, saying the hospital no longer has the capacity to meet demand. Akcicek has 17 physicians to serve 75 beds, compared with 23 doctors and 56 beds in 2003, according to Sila Usar, leader of the TRNC doctor’s union. 

Recognising progress

As in Turkey, most of the TRNC's private hospitals are linked to the country's eight universities. Founded in 2010 in Nicosia, Near East University Hospital, a pioneer of medical travel to the TNRC and still the largest in Northern Cyprus, has 209 private single-patient rooms, eight operating theatres, a 30-bed ICU and a full portfolio of support and diagnostic services.

One healthcare supplier that has already made some progress in pioneering the international medical travel sector in Northern Cyprus is Turkey's Kolan Hospital Group. Kolan British Hospital in Lefkosa, Nicosia, the newest in its portfolio of 10 clinics and hospitals, opened in 2013. With 100 beds, three operating theatres and 35 'VIP' rooms, it offers diagnostic procedures including MR and TK technology, ultrasound, mammography and bone density scanning and treatments including cardiovascular and bariatric surgery, infertility treatment, plastic surgery, hair transplantation, and dentistry. Kolan has forged a relationship with Esti Tour, a Polish specialist medical and cosmetic surgery tourism which advertises the 'cheapest medical solutions worldwide' and promotes medical travel to hospitals in Poland and Turkey, claiming standards of care and treatment that match those in Western Europe, but at prices that can be 60 per cent lower.

Other recent developments in Girne include the Dr Suat Günsel University of Kyrenia Hospital, opened in 2017 by former staffers of Nicosia's Near East University Hospital to meet a perceived shortage of well-equipped hospital beds to serve growing numbers of patients. The new complex includes 38 private wards, eight operating theatres and three intensive care units (one for newborns) and cardiogram and radiology units, and specifically aims to pioneer international health tourism to the TNRC, according to its spokesman Dr Ozgur Turk.

The Dr Suat Günsel Hospital took just under a year to complete. Another, more ambitious project is taking longer. In 2013, the Turkish hospital group Florence Nightingale announced a joint venture with Istanbul Bilim University and Girne American University to build the €160 million Smart Health and Medical Center complex in Girne, Kyrenia, which would offer a range of specialist services and, claimed GAU chairman Serhat Akpinar, make Northern Cyprus a regional hub for international patients. “This project will be the biggest health investment project that has been ever made for TRNC,” Akpinar stated.

The complex, planned to include 12 polyclinics, an emergency room and intensive care units, and an addiction and rehab centre, was scheduled for completion in 2015 as the first of six hospitals to be managed by Florence Nightingale in Northern Cyprus. In 2016, Akpinar said it would accept its first patients in February 2017, and also announced plans for future hospital developments in Nicosia, the TRNC's capital and largest city.

However, the project has been plagued by delays, blamed by its developers on TRNC bureaucracy. In a statement, GAU's health investment co-ordinator Günhan Nalbantoğlu said bureaucratic obstacles to investment had meant the new complex would open some 18 months later than planned. “We are not the source of the delay,” Nalbantoğlu insisted, implying that the TNRC government had not smoothed the way for the project's inward investors. “Of course there will be procedures and bureaucracy, however all the services with investment should have been prioritised.”

Unknown impact

The TRNC's problematic relationship with its southern neighbour and with the rest of the world, the lack of any objective local media coverage, and an endemic lack of transparency make it hard to determine that status of the project. Neither Group Florence Nightingale nor Girne American University were willing to comment to the International Hospitals & Healthcare Review (IHHR) on whether it will, in fact, go ahead as originally envisaged.

The lack of transparency surrounding the GAU Hospital project also extends to international accreditation. Launching the Girne project, Serhat Akpinar implied the new hospital would meet "...European Union health structures general criteria and JCI accreditations criteria", but neither entity appears to have been involved at this stage. Similarly, Near East University Hospital claims that “the criteria set forth by the JCI have been adopted in advance in order to be recognised as a world-class health center offering the best possible medical and other relevant services.”  However, JCI in fact lists no accredited hospitals in either the TRNC or indeed in the Republic of Cyprus.

It is still too early to tell what long-term impact the failure of reunification talks may have on the TRNC's private medical sector. However, it is clear that despite the ambitions of hospital developers and politicians, uncertainty, bureaucracy and lack of transparency will continue to be formidable obstacles that must be removed if the TRNC is to attract the foreign partners and investors that it needs to fulfil its dream of building a thriving private medical infrastructure that will attract an international clientele.