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Construction of Papworth Hospital delayed until mid-2014

The £206m PFI project to build a new Papworth Hospital has been delayed until summer 2014, with bids now likely to be “completely out of date”.

The final business case for the hospital on the Cambridge Biomedical Campus has still not been approved by the Department of Health or the Treasury.

Construction of the 310-bed facility was originally due to begin in late 2012, with completion scheduled for late 2015. When this timetable slipped, the hospital trust originally expected approval in April 2013.

However, in April, Construction News revealed that work on the £206m hospital scheme would be delayed until March 2014 with completion by the end of 2016.

Now that sign-off of the business case has slipped further, Papworth Hospitals NHS Foundation Trust has confirmed it does not expect to sign a contract with a preferred bidder until summer 2014.

A spokeswoman said the hospital would not be open to patients until early 2017. She said the hospital was “in the final stages of the appointment business case approval process”.

“There’s been nothing put forward by any of the key players which would qualify as a reasonable excuse for this delay”

Senior industry representative

To date, the new Papworth Hospital has been through six layers of approval – with the DoH, Treasury and health services regulator Monitor each having to approve first the strategic outline case and then the outline business case.

A senior industry source told Construction News the delays are down to “monumental government inefficiencies”.

The number of approvals required by a range of bodies, several of which have been affected by recent reforms of the health service, has left “old entities unwilling to make decisions when new entities were about to be put in place, and new entities unwilling to accept the positions of their predecessors”, the source said, making the process “just short of impossible”.

“There’s been nothing put forward by any of the key players which would qualify as a reasonable excuse for this delay, mucking around bidders and further delaying patients’ opportunity to have their operations in a modern and well-designed hospital,” the source said.

Vinci wins £7m North Essex NHS deal

Vinci has been awarded a £7.2m deal by North Essex Partnership University NHS Foundation Trust for the expansion of the Derwent Centre, where mental health services (inpatient and clinics) are provided at Princess Alexandra Hospital in Harlow.

The contract covers the second, third and fifth phase of the project to revitalise the centre.

A new outer shell will be created and floor space will be vastly increased by adding three new storeys.

The ground and first floor levels will be refurbished and fitted out. Landscaping will also be carried out in the surrounding area.

Single, en-suite rooms will be built with separate reception areas for new patient admissions and visitors.  

The project is scheduled for completion in November 2015.

In August this year, the Cabinet Office’s latest update to the government construction pipeline still described the hospital as “planned” and “on schedule” to be in service by the end of 2015.

A DoH spokeswoman said: “PFI schemes are financial commitments and we must consider them properly and thoroughly before any decision can be made.

“We are still considering the trust’s business case and we expect a joint decision with the Treasury will be made soon.”

“PFI schemes are financial commitments and we must consider them properly and thoroughly before any decision can be made”

Department of Health spokeswoman

Papworth was originally due to sign a contract with a main contractor in 2012, but a preferred bidder for the new hospital has not yet been announced.

In July 2011, a Bouygues UK and Ecovert consortium and a Skanska PFI team were selected to proceed to the final stage of procurement after a consortium of Laing O’Rourke, John Laing and Interserve fell out of the race.

The two teams submitted their final bids in 2012, but the source told Construction News those bids will now be “completely invalid and out of date” due to construction price inflation.

Although “none of the prices will stick” by the time the project starts on site next summer, the source said the trust would not be able to afford to increase the budget for the hospital.

The winning contractor would have to find efficiency savings or the project brief would have to change to build the hospital within the original budget, the source added.

Royal Liverpool Hospital:

In May, Carillion was revealed as the preferred bidder for the £429m Royal Liverpool hospital scheme, which will include 18 operating theatres and 23 wards, a large clinical research facility and a 40-bed critical care unit.

The scheme had also been beset by delays, after Construction News revealed in April that financial close had been put back by six months until January 2014.

Liverpool City Council last month approved Carillion’s plans for the hospital, with a contract for construction on the hospital to be worth around £335m.

Construction is expected to start early next year on the scheme.

The DoH said its estimation of the construction cost of the project had not increased, but that the final cost would be negotiated with the preferred bidder.

When appointed, the preferred bidder will prepare detailed design, development and financing plans, which must again be approved by the DoH and the Treasury before financial close is reached and construction can begin.

Under the PFI contract, the selected bidder will raise finance for the project, design and build the new hospital, and manage it for a 30-year operation phase.

Papworth will then make payments when services are provided to the agreed standard.

The tendering process began 35 months ago in November 2010 when three bidders were shortlisted to tender for the project.

Under private finance 2, which has since replaced PFI on new projects but has not been imposed on projects already in procurement, the Treasury has called for an 18-month cut-off for procurement from tender to appointing preferred bidder.

Skanska and Bouygues declined to comment.

Project timeline

2004 – Strategic outline case for the project approved by the DoH.

2005 – Papworth Hospital decides to relocate to Cambridge Biomedical Campus after consultation.

2008 – Project reviewed and approved by Monitor, the regulator of NHS Foundation Trusts.

2009 – Outline planning consent granted for Cambridge Biomedical Campus scheme and Monitor approval reconfirmed.

2010 – OJEU notice issued and three shortlisted to tender: Apex Health (Laing O’Rourke, John Laing and Interserve), Bouygues Consortium and Skanska.

2011 – Bouygues and Skanska invited to proceed to next stage of procurement following evaluation of interim bids.

2012 – Construction due to start, but delayed. Final bids submitted by Bouygues and Skanska.

2013 – Papworth Hospital awaiting final business case approval from DoH and Treasury.

2014 – Construction due to start in the summer.

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