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PFI proves its health

NEWS - Latest six hospital projects reaffirm contractors' belief in Government commitment to procurement

CONTRACTORS are confident the Government is committed to the longterm future of the Private Finance Initiative after it gave the green light to six new PFI hospitals worth £1.5 billion last week.

Firms have come under fire for making too much money under PFI. But one source at a major contractor said: 'I don't think the Government will tighten up on the private sector. They have hospitals they want to get built and they will cost what they will cost. That's the way it has always been.'

Another insider said: 'We have seen no let-up in the Government's commitment to PFI, particularly in the health sector, and as a company we continue to be very enthusiastic about PFI.'

The latest round of hospital building involves expanding accident and emergency departments, building a new cancer care centre and improving community services. They will be ready to handle their f irst pat ients in 2010.

The largest project is for the University Hospitals Leicester NHS Trust, which will receive a £711 million facility providing a new women's unit and 2,000 extra beds.

University Hospital North Staffordshire NHS Trust will get a £272 million new community hospital and cancer centre.

Torbay Hospital will undergo a £163 million redevelopment with a similar £140 million revamp of The Manor Hospital for Walsall Hospitals NHS Trust .

A new £112 million hospital will be built for the Salford Royal Hospitals NHS Trust and the Tameside and Glossop Acute Services NHS Trust will use £68 million for building a 30-place mental health hospital as well as new surgical wards and operating theatres.

The projects will add to the 30 PFI hospitals currently being built across the country.

The announcement followed criticism of the private finance approach to new hospital building for making excessive profits from refinancing deals and charging extortionate amounts for maintenance work.

Contracts signed since 2002 stipulate that refinancing profits should be split evenly between the public and private partners, meaning the hospitals get an equal slice of surplus cash.