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Carillion on stand-by for £1.1bn PPP hospital financial close

Mowlem suitor Carillion is due to reach financial close on a £1.1 billion PPP deal to build the 1,200-bed Queen Alexandra Hospital in Portsmouth, Hampshire.
Carillion's Hospital Company consortium - a 50/50 joint venture with the Royal Bank of Scotland - was picked by the Portsmouth Hospitals NHS Trust for the scheme over two years ago in July 2003.

Work was originally due to start on site in early 2004 and open in 2007. Mowlem, Taylor Woodrow, HBG and Sir Robert McAlpine all pitched for the scheme.

The new hospital will bring together acute treatment facilities from three existing locations across the city. Carillion will also provide facilities management services over a 35-year concession period, the construction cost is expected to be around £200 million. Queen Alexandra will be Carillion's ninth PPP hospital.

Yesterday Carillion upped its bid to buy rival Mowelm to 220p a share valuing the company at £313 million, ahead of any possible offer by Balfour Beatty which announced its interest in Mowlem on Monday. At the time it said there was 'no certainty' of it making an offer.

By Sophie Kernon