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07.06.18

New Birmingham hospital stalled by Carillion collapse loses over £100m in EU funding

Funding for the building of the Midland Metropolitan Hospital has been terminated by the European Investment Bank (EIB) following the collapse of lead contractor Carillion.

The EU bank had previously pledged the cash to be put towards the hospital in Smethwick, West Midlands in 2015, but now blamed “ongoing project costs” of £5m for pulling out.

Last week chief executive of Sandwell and West Birmingham NHS Trust Toby Lewis claimed that if the new hospital is not weather-proofed by winter, then ongoing costs could rise even further. Last month MPs found that the hospitals stalled by construction giant Carillion’s bankruptcy were a result of “recklessness, hubris, and greed.”

Lewis told the BBC today: “We have to work with the government and various partners to get this finished. We've got to find a financier and a builder by whatever vehicle government determines.

“We have been saying this hospital will open in 2022 for some time and the announcement doesn't change that.”

Credit Agricole, KfW IPEX, DZ Bank and Sumitomo Mitsubishi Banking Corporation had all contributed funds and now could lose a significant amount, the EIB said.

The collapse of Carillion meant the two-thirds built hospital was expected to require an extra £125m on top of its £350m original bill. But now, exposure to elements during the winter will add to the total bill, in addition to a two-year delay on the opening date of the hospital.

Sandwell Council will be discussing a report put forward by Lewis regarding the future of the hospital today.

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