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Laing O'Rourke consortium sues Department of Health

A Laing O’Rourke-led consortium has launched a £20 million law suit against the Department of Health and the University Hospitals of Leicester NHS Trust over a cancelled £921 million hospital project.

Triskelion ­ made up of Laing O’Rourke, John Laing and Serco ­ this week issued legal papers to the two organisations in a long-running row over the cancellation of the Leicester Pathways project.

The consortium was appointed preferred bidder in March 2005 for the project, to build the UK¹s third-largest PFI-funded hospital.

But after a nine-week review, UHL NHS Trust and the DoH pulled the plug on the project in July 2007, concluding it was “no longer value for money”.

The development cost had risen from £711 million to £921 million with no guarantee it would not rise further.

Despite a six-month review to look at alternative plans, no project has progressed since.

Triskelion, which claims it had spent millions of pounds on the project by the time it was cancelled, is to recoup up to £20 million.

A spokesman for the consortium said: “Triskelion believes that its claim is justified legally.

“Triskelion has been attempting to resolve this issue for more than two years and has regrettably been left with no other option than to seek redress through the courts.”

A spokeswoman for the DoH, which is headed by Andy Burnham (pictured), said that as it was an ongoing legal proceeding, it would be inappropriate to comment at this stage.

A spokesman for UHL NHS Trust said it had not received the legal papers at the time of going to press.

He said: “We are aware that the Triskelion consortium has indicated an intention to pursue proceedings, although no claim has yet been served.

“Any proceedings will be defended robustly by the Trust. However, in light of such potential litigation it would not be appropriate for us to comment further at this stage.”

The £711 million initial cost was agreed upon by UHL NHS Trust and Triskelion when both signed a memorandum of agreement in the summer of 2006.

This kept the project within the financial parameters set by the East Midlands Strategic Health Authority and the DoH.

But the scheme was re-scoped to make greater use of existing buildings, increasing the cost.

At the time of the cancellation, then UHL chief executive Dr Peter Reading said: “The cost increase after the agreement reached last summer really brought the scheme to a crunch point.

“The £711 million had been the level set at which Pathway was best value for taxpayer¹s money. Another £210 million, which was required to deliver the specified scheme, meant that this was no longer the case.”