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Construction firms in line for NHS partnership contract

Two construction firms are part of consortia shortlisted for a £120m NHS project to help a struggling hospital improve the efficiency of its estate.

The successful bidder for the Burton Hospital Foundation Trust’s “strategic infrastructure and efficiency partnership” will join the trust in a joint venture to manage several hospital sites, according to an OJEU tender posted in December.

The final three includes a consortium featuring Japanese contractor Kajima and healthcare developer GB Partnerships.

The consultancy EC Harris, which provides annual research updates on the efficiency of NHS estates across the country, is also in the running, working alongside Community Solutions, a division of Morgan Sindall Investments.

Ryhurst, which has won three of the six estate partnerships that have been tendered through OJEU to date, is the final contender in the race.

Burton is expected to unveil its preferred bidder next month with a view to setting up the JV later this year.

Law firm Bevan Brittan helped to develop the strategic estate partnership model.

Interest from new entrants to the fledgling market has been welcomed by those involved.

One source close to the bidding process told Construction News: “It is good to see some new private sector players in the market. This is an interesting market that is developing.”

As a member of the JV, the successful bidder will be well placed to pick up extra work through the secondary procurement of services and capital projects.

Such projects could have a total value of up to £150m over the course of the JV agreement, according to the OJEU posting.

Around £8m of secondary services are expected to be procured through the JV during the course of the contract, which will run for an initial 10 years with an option to extend by five more.  

The successful bidder will also be expected “to provide access to, arrange, and deliver private sector capital where required to finance new projects,” according to the tender notice.

The trust’s financial position is predicted to worsen significantly this year, according to Construction News’ sister title Health Service Journal.

According to trust papers from February, its deficit is expected to increase from £12.7m to £22.7m by the end of 2015-16.

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