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Treasury holds up Carillion replacement on Midland hospital

The appointment of a new contractor on Carillion’s Midland Metropolitan Hospital project is being held up by the Treasury, NHS board papers have revealed.

Sandwell and West Birmingham NHS Trust said it was awaiting “approval / clearance” from the Treasury to enable the site to re-open.

The trust added that it still needed to reach an agreement on timeframe to see if an early works contract could be approved to kick-start construction.

The papers show the Department of Health is having weekly meetings with the trust regarding the restart of work, but that there was no resolution over the additional investment required to finish the project, or over the timescales involved.

Skanska has been poised to take on the contract for the £350m scheme after rival Kier confirmed it was out of the running in March, but a deal has yet to be completed for work to restart.

Last month trust chief executive Toby Lewis warned that the hospital site was now “deteriorating” which would result in significant remedial costs for the project.

He also revealed a 2022 opening date was “more likely” than the 2020 date the trust had targeted.

The NHS chief has previously been quoted as saying he anticipated additional costs of around £100m-£125m to finish the project.

Prior to Mr Lewis’ disclosure, West Midland metro mayor Andy Street publicly called for the government to approve Skanska’s appointment and “help avoid further delays to the project”.

Previous NHS trust board papers have shown how the client tried to keep Carillion construction staff on site after the contractor entered liquidation.

The Treasury has been contacted for comment.

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