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Sat August 18 2018

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Call goes out for Midland Met Hospital rescue

9 Aug A formal contract notice is published today for a contractor to step into the breach on the stalled Midland Metropolitan Hospital project in Birmingham.

Construction of the Midland Metropolitan Hospital stopped in January when Carillion collapsed
Construction of the Midland Metropolitan Hospital stopped in January when Carillion collapsed

Carillion, through its private finance initiative (PFI) vehicle The Hospital Company, was part way through construction of the £350m Midland Metropolitan Hospital when it went into liquidation in January 2018. Technical problems on the hospital, including cracked beams that had to be reconstructed, had led to substantial cost overruns, contributing to Carillion’s demise.

Sandwell & West Birmingham NHS Trust, the project client, finally terminated the contract with The Hospital Company on 20th July and is now seeking to complete the project with public money. Trust chief executive Toby Lewis said in April that Skanska was the preferred bidder to take over the project.

A contract notice is published today in the Official Journal of the EU for what is described as an early works contract on the project – “to undertake various protective and dilapidation works designed to protect the site as far as possible until a replacement construction contractor is appointed”.

It states: “The Trust is considering its options for the completion of the construction of the hospital and that will be the subject of a separate procurement. At this time the Trust wishes to enter into an early works contract with a construction company which is experienced in acute hospital construction to undertake various protective and dilapidation works designed to protect the site as far as possible until a replacement construction contractor is appointed.

“The works will include dilapidation works and construction works aimed at the reduction of further site and/or asset dilapidation, reinforce the resilience of the building and secure site containment. They will also include works that may add value for the Trust by reducing ongoing storage and/or maintenance costs or that are commercially advantageous to the Trust.”

The full scope of works under the contract will be subject to negotiation one the contractor has its feet under the table, but current indications are that the contract value will be in the range of £13m to £20m, just to keep the project at standstill.

Several subcontractors appointed as part of the original project agreement to undertake works for Carillion must be kept on board to maintain continuity and keep control of costs. These include: MJ Gallagher Contractors (completion of the ramps); Novum Structures (Winter Garden roof, extract flues, glazing); Prater (general envelope work and plant room cladding); and Dean Wilson Architectural (balustrading).

Bidders have only until 1pm on 23rd August 2018 to declare themselves. The procurement documents are at: www.nhssourcing.co.uk

MPU

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