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Legal row brews over Dudley hospital work

NEWS - Sir Robert McAlpine locks horns with Dudley Health Trust over disastrous scheme

THE CLIENT on a PFI job blamed by Sir Robert McAlpine for blowing a £100 million hole in its accounts said the firm would still be building the project today if it had not stepped in to save it.

Sir Robert completed its Dudley hospitals scheme in the West Midlands at the end of March ? six months late.

According to the builder's latest annual report and accounts filed at Companies House, it lost over £72 million on the Dudley job in the year to October 2004 adding to the £24 million it had already booked on the project for 2003.

The capital cost of the scheme was init ially budgeted at £160 m illion.

The scale of the losses are thought to have eclipsed even those made by John Laing on its own PFI contract nightmare ? the National Physical Laboratory in west London.

McAlpine said: 'The challenges of carrying out extensive refurbishment in a complex environment, continuing difficulty in agreeing the scope of the work and little or no co-operation from the trust resulted in the contract being delivered late and at huge cost.'

But Paul Brennan, operations director for the Dudley group of hospitals, claimed things would have been far worse if the trust had sat on its hands.

He said: 'The project was in serious difficulty in 2003 and it was only the intervention of the trust that kept it live.

I wouldn't want to contemplate what would have happened if we hadn't.

'They were way behind on building. If we hadn't rescheduled the programme they would still be building it now.' McAlpine had to draft its third project team onto the job in summer 2003 to complete the job. Work involved refurbishing and building two wings at Russells Hall hospital in Dudley as well as building two ambulatory centres at Corbett hospital, in nearby Stourbridge, and Guest hospital, also in Dudley.

Legal action by McAlpine now looks likely. Its statement added: 'The trust has instructed a significant amount of additional works, which have not been processed.

'McAlpine made a group pre-tax loss of £26 million. We are pursuing recovery of these amounts and the associated costs of delay.'