Skanska was chosen as preferred bidder ahead of Bouygues for the new Papworth Hospital for its “fantastic clinical design”, according to its chief executive.
Stephen Bridge told Construction News that he was confident of reaching financial close on the scheme, despite what he admitted was an “overly bureaucratic” process that had resulted in the scheme going through multiple layers of approval up to this point.
“We are a prudent organisation which has taken advice every step of the way,” he said.
“I think Skanska has a real desire to do this project and I hope it knows we deliver what we say we will.
“I don’t have a clinical background but we asked nurses and the medical delivery [team] to get involved in the evaluation.
“On balance, their clinical design was superior to Bouygues, even though Bouygues’ was extremely good.”
Once financial close is achieved, Skanska will design, build and maintain the new Papworth Hospital under a 30-year PFI when it relocates to the Cambridge Biomedical Campus.
Two consortia had been in the running: the Bouygues Consortium comprising Bouygues UK and Ecovert FM; and a Skanska-led team of Skanska Infrastructure Investment UK, Skanska Construction UK, Skanska Facilities Services and OCS.
The £165m building has been repeatedly delayed and although it received Department of Health approval in October, it must still secure Treasury sign-off after procurement was changed from a parallel process to a sequential one.
Construction of the 310-bed facility was originally due to begin in late 2012, with completion scheduled for late 2015. When this timetable slipped, the hospital trust originally expected approval in April 2013.
Papworth Hospital’s NHS Foundation Trust confirmed to Construction News in October that it does not expect to sign a contract with the preferred bidder until summer 2014, with the hospital not open to patients until early 2017.
The financial case for the scheme has been approved twice in the last two years, but Mr Bridge admitted there were still months of negotiations to go, with healthcare regulator Monitor’s approval again required before the scheme reaches financial close.
“We are confident we’ll be able to raise the money because it is an excellent project, but we have to prove we have a value-for-money proposition we can afford,” he said.
“It’s about seizing the moment now, as there is a lot happening here.”
Pharmaceutical giant AstraZeneca is establishing a new £330m global headquarters at the Cambridge Biomedical Campus and Mr Bridge said this would help Papworth to prove the business case for the private finance initiative scheme, which was originally estimated in the government’s construction pipeline to cost £206m over the 30-year lease.
Mr Bridge admitted the process had been through significant hold-ups due to the context of wider NHS reforms and having to prove “we are doing everything by the book”.
Due to what he described as “wider NHS difficulties” and time delays on the project stretching back almost a decade since it was first approved, Papworth has been able to retrofit financial improvements to the scheme, as revealed by Construction News in February, under the new private finance 2 model announced by the government.
He said a unitary payment, or annual charge, going up annually linked to the retail price index, as was common in hospital PFIs, was “a thing of the past with this scheme” and that the hospital “wouldn’t be going into it if it didn’t think the new scheme was affordable”.
He said the new facility was a good investment opportunity for several reasons, including the fact that 83 per cent of Papworth admissions are planned, and that it will treat heart and lung patients – “sadly two of the biggest reasons why people come to hospital” – meaning it will offer returns on investment.
He added that if work dried up and taxpayers no longer needed the facility, it could be used by Addenbrooke’s Hospital (situated adjacent to the new campus) for other purposes.