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Kent PFI hospitals scheme killed off as costs soar to £250m

A £100 MILLION Private Finance Initiative scheme to revamp three hospitals in Kent has been killed off after costs ballooned to £250 million.

East Kent Hospitals NHS Trust had been working on proposals to overhaul three hospitals in the county, the William Harvey Hospital in Ashford, the Queen Elizabeth the Queen Mother Hospital in Margate and the Kent and Canterbury Hospital in Canterbury.

When the case was put together for the scheme in 2001 it was valued at £102 million. But an independent team of government inspectors was drafted in to investigate the scheme after this figure escalated to around £250 million.

The Department of Health Independent Review Panel has now made a recommendation that the scheme, which had already been suspended, should be thrown out.

Its report said: 'With the deteriorating financial situation and concern expressed by the four primary care trusts there has been a growing realisation that the PFI scheme is no longer affordable.

'The scheme has now been suspended.

At the point it was suspended, the PFI scheme had grown to an estimated cost in excess of £250 million. Whether, in fact, these proposals can ever be resurrected in their present form is a matter of some doubt to the panel.'

A spokeswoman for the trust this week confirmed that the scheme would not go ahead.

The trust will now redraft proposals for it once it has sorted out its financial problems.

Meanwhile the next tranche of PFI hospital projects is ready for take-off. The £800 million Paddington Health Campus scheme is already looking for contractors. Sources at Peterborough Hospitals NHS Trust said this week that it hopes to advertise its £269 million scheme in September. The £230 million Plymouth hospitals PFI is targeting October for its launch while the much delayed £313 million Whipps Cross hospital overhaul in London will be advertised in early 2004.

Walsall Hospitals NHS Trust's £117 million scheme and Wolverhampton Hospitals' £312 million scheme are understood to be lined up as possible candidates for the Department of Health's batched procurement process.