Commissioning

01.11.18

NHS trust struggling to find replacement to build post-Carillion Birmingham hospital

The NHS trust responsible for building the new Birmingham hospital has admitted it is struggling to find a replacement after Carillion’s collapse cast doubt over the £350m construction.

The Sandwell and West Birmingham Hospitals NHS Trust said there was still a risk of the trust being unable to find a firm prepared to take over the site of the Midland Metropolitan Hospital, although it is still hoping to finish the scheme in Smethwick by 2022.

In its board papers published ahead of its latest meeting, the trust said there was a possibility “the procurement process for the replacement financier and contractor does not result in a compliant bid in 2019 because of insufficient market availability resulting in Midland Met delivery delay beyond 2022.”

On its monthly risk register, the trust gave a risk score of 12 out of 25, an amber warning, which represents a significant risk, but has fallen since its last report which gave a rating of 20.

In the papers, the trust said the final costs on the project would not be known until the project reached its commercial close in 2019, but the trust’s CEO Toby Lewis claimed that costs of the delays alone would reach an eight-figure sum.

The trust’s Estates Major Projects Authority Committee also mentioned “market appetite for final contract bidding in the event of approval delay or prolongation” as another potential problem.

Carillion’s liquidation leaves the hospital two-thirds built, with estimates saying it will cost an extra £125m on top of the original £350m bill, and Lewis warned that the final costs could soar if the building wasn’t weather proofed by winter.

The Midlands Metropolitan Hospital will hold 15 operating theatres and at least 669 beds, along with state-of-the-art diagnostic equipment, maternity care and specialised surgery for around 750,000 residents.

In August, the government agreed to fund the remainder of the construction work after working closely with the NHS trust since Carillion went into liquidation and the work under a PFI agreement was halted.

PFI contracts have now been scrapped as part of the chancellor Phillip Hammond’s Budget commitments.

 

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