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Midland hospital costs rise as Carillion replacement stalls

The costs of re-work and repairs on the Midland Metropolitan Hospital following Carillon’s collapse will be “eight figures”, according to the local NHS trust boss.

An update for Sandwell Council from Sandwell and West Birmingham NHS Trust chief executive Toby Lewis said remedial works could cost tens of millions of pounds, as the process of installing a new contractor on the project had stalled.

Building work on the site ceased after Carillion went into liquidation in January, and “some parts of the building will require re-work”, according to Mr Lewis.

“The trust’s board has asked for a formal assessment of that cost during June,” he said. “However, we know that the cost will be in eight figures.”

Mr Lewis warned that if the site is not weatherproofed before winter then re-working costs will rise further.

A plan put forward in March to transfer Carillion workers to a new contractor and for work to restart has stalled, according to Mr Lewis, and is “unlikely to progress in its current form”.

Construction News understands Skanska has been lined up to take over on the site.

West Midland metro mayor Andy Street wrote to the government in April calling on it to support Skanska’s appointment and get the project going again.

The Treasury is one of the investors in the PFI hospital through the Infrastructure and Projects Authority, along with private investors.

Mr Street had told the government that if a replacement contractor started work before the end of April then the hospital could be opened by March 2020.

Mr Lewis has now said that the delay in appointing a new contractor meant a 2022 opening date for the hospital was now “the most likely scenario”.

He added: “The delay is deeply disappointing and frustrating, and the hiatus over finding a solution is likewise concerning; however, the [council] should be assured that there is no question mark over the new build [being completed].”

Carillion signed the deal to deliver the £350m Midland Metropolitan Hospital in December 2015.

It was scheduled to open in October this year, but construction problems under Carillion saw the date pushed back to spring 2019.

The contractor’s collapse has also hit progress on the Royal Liverpool Hospital, where the local NHS trust is awaiting a structural engineering report from Arup on the work required to complete the job.

Skanska has been contacted for comment.

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