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NHS trust rejects PPP for Glasgow hospital project

The trust behind Scotland’s largest hospital project has called for the scheme to be procured as a traditional design-and-build deal rather than a Public Private Partnership.

Last week NHS Greater Glasgow and Clyde published its outline business case for the £42 million South Glasgow Hospital project, set to be submitted to the Scottish Executive for approval.

The project combines a 1,109-bed adult hospital, a 240-bed children’s hospital and a 5,200 sq m laboratory on the site of the existing Southern General Hospital in Govan, south Glasgow.

The trust considered either a PPP approach, or using the non-profit distributing procurement model favoured by the ruling Scottish National Party Government.

But it has now turned its back on these proposals, instead asking the Scottish Executive to stump up the entire cost of the job under traditional procurement. It claims the model will provide better value for money for the taxpayer than the PPP or NPDO approach.

Andrew Gordon, chief execu-tive of Glasgow-based specialist PPP firm Canmore Partnerships, cast doubt on the viability of the proposals.

He said: “The Government has to be prepared to give up the money required to pay for this.

“I’m not against traditional procurement but the UK Government is in a fairly tight position when it comes to funds. And the Scottish Government also has additional funding considerations such as its promise of free healthcare for the elderly.

He added: “Quite where the extra millions to pay for this are going to come from without going to the private sector, I am not sure.”

The trust hopes to get final approval of its outline business case next month, opening the door for the contracts for technical advisers, a design team and a contractor to be advertised.

Construction is pencilled in to start in autumn 2010, with the children’s hospital expected to open in early 2013 and the adult hospital following in summer 2014.

Next step to decision on funding

A consultation on the Scottish Futures Trust, under which the ruling Scottish National Party hopes to fund future projects via bond financing, is due to finish in just over two weeks’ time.

The Scottish Government has said that getting rid of PFI will remove the “most extreme and unwarranted” profits.

The non-profit distributing mechanism is being used for the first time in the health sector on the £83 million Tayside and North Scotland mental health development project which will revamp units in Perth and Brechin.

Last month three teams – Canmore Partnerships, John Laing/Laing O’Rourke and Robertson – were shortlisted to enter competitive dialogue bidding for the project.

ork on the project is due to start in autumn 2009.

Click here for Q+ A - Scottish hospital building framework