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Carillion: £335m Royal Liverpool Hospital ‘faces default’

The NHS trust behind Carillion’s £335m Royal Liverpool Hospital will have the option to declare the project in default from 30 September, according to the minister for health and social care.

The date, described by Stephen Barclay MP as a “key milestone”, is the date of completion as listed in Carillion’s contract to build the scheme.

As the hospital will now not be delivered by this date, the Royal Liverpool and Broadgreen University Hospitals NHS Trust has the ability to terminate the entire private finance initiative deal.

The minister, who suggested there was “some other option” as well as the deal’s termination, said the government had told the trust it would support whatever steps it needed to take to ensure the project avoided further delay.

Mr Barclay also revealed that “significant concerns” had been identified with Carillion’s work on the project, the investigation of which had also led to delays.

Arup is known to have carried out a structural review of Carillion’s work on the hospital to identify how much additional work it requires.

Mr Barclay was responding to a question from Liverpool MP Dan Carden about the progress of the scheme, which has been on a hiatus since Carillion’s liquidation in January.

In June the trust said the financial backers of the £335m hospital “remain[ed] committed” to the project.

The statement came following the termination of the contract for Carillion’s other major PFI scheme: the Midland Metropolitan Hospital.

Laing O’Rourke has long been touted as the replacement contractor for the job, although an agreement has not yet been reached for it to take on the project.

The £335m Royal Liverpool scheme has been plagued by a number of setbacks and missed deadlines even before Carillion’s demise.

In January 2016 cracked concrete beams were discovered, resulting in a delay of a year.

A further delay was revealed shortly before Carillion’s collapse, with the trust announcing its intention to “closely monitor” Carillion’s work on the project.

Responding to Mr Barclay’s comments, a Royal Liverpool and Broadgreen University Hospitals NHS Trust spokesperson said: “The board will be discussing all their options later this month.”

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