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Mayor wants Skanska to finish Carillion hospital

West Midland metro mayor Andy Street has urged the government to support Skanska’s appointment on Carillion’s stalled Midland Metropolitan Hospital.

In a letter to Cabinet Office minister to David Lidington, Mr Street said: “The Hospital Company which is leading the project under a PF2 contract has successfully identified a preferred replacement contractor, Skanska, to start an early works contract, which will help avoid further delays to the project.”

He said Skanska should start work unless “clear, timetabled alternatives are laid out over the next two weeks”.

Mr Street also warned against re-procuring the scheme, which is understood to be around two-thirds complete.

“I acknowledge there are other alternatives which may be preferred, for example a wholesale re-procurement of the PF2 contract or self-delivery under another form by the trust,” he said.

“However, I share some of the trust’s concerns about the time this would take. This would cause a potential delay to moving to the new site, with inevitable knock-on [effects] for medical services.”

He added that while he was “grateful” for the government’s post-Carillion support in the West Midlands, “swift intervention is now required” on the hospital project.

Mr Street’s call for government action was echoed by Labour MP John Spellar on Wednesday.

During Prime Minister’s Questions he urged Theresa May to “get a grip on her ministers and officials and get a decision, get a deal and get this hospital built”.

Skanska commencing work imminently would mean the hospital could open by Q1 2020, according to Mr Street.

Midland Metropolitan Hospital was originally due to open in October 2018 before Carillion pushed this back to “early spring” 2019, citing M&E design issues.

However, the cost to complete the scheme is expected to increase.

Sandwell and West Birmingham NHS Trust chief executive Toby Lewis told Sky News this week: “We are expecting that to finish this hospital it will cost about £100m to £125m more than had originally been anticipated.”

The PF2 hospital was originally expected to cost £350m.

Construction News exclusively revealed Skanska and Kier were in the running to finish the hospital last month, later confirming that Kier had not been picked.

Recent board papers from the Sandwell and West Birmingham Hospitals NHS Trust revealed that it had tried to keep Carillion construction staff on site after the company was liquidated to avoid “further delay to the project”.

Skanska has been contacted for comment.

Readers' comments (1)

  • So is the suggestion that the tax payer shells out another £100m + due to the Carillion liquidation? I always thought the Trust was in contract with the PFI SPV who should be carrying this risk not the tax payer. Isn’t that why they get the interest rate and potential resale value increase. Otherwise what is the point of PFI if the SPV carries no risk?

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