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O'Rourke picked for £75m hospital PFI

Laing O’Rourke has further cemented its position as one of the country’s leading health contractors as it was confirmed as the builder for a £75 million Private Finance Initiative hospital deal in Middlesbrough.

The firm is in a team with longstanding PFI partner John Laing that today reached financial close on the £75 million Ad>ance project, to build a new hospital for mental health and learning disabilities care to replace the existing St Luke’s Hospital in Middlesbrough for the Tees, Esk & Wear Valleys NHS Trust.

The new 312 bed hospital, with a floor area of 26,700 sq metres, will be used to provide a wide range of mental health and learning disability services.

John Laing will invest equity in the project, which will be built by Laing O’Rourke and maintained by John Laing Integrated Services over a 30-year concession. HBOS will provide £81m of senior debt having won a funding competition managed by John Laing and PwC with public sector oversight which will form the model for similar competitions in PFI hospital procurement in future.

Peter Ward, director of Healthcare Projects at John Laing Investments said: “We are delighted to have been chosen to deliver this project, which will vastly improve the quality of the trust's facilities and the image of mental health and learning disability care.

"Its procurement also featured a number of new measures designed to offer better value to the NHS, such as new approval processes and a very competitive funding competition. To work through these and still reach financial close in six months does great credit to the experience, flexibility and collaboration of our teams".