This follows the announcement on 8 June that Infrastructure Ontario & Halton Healthcare Services had selected Hospital Infrastructure Partners as the preferred bidder to finance, design, build and provide facilities management and life-cycle maintenance services for the new hospital.
The project will be delivered using the Alternative Financing & Procurement (AFP) model, which is similar to the UK's Public Private Partnership (PPP) model. The 30-year contract is expected to be worth some £1.3bn at 2011 prices and £1.7bn after taking into account indexation for anticipated price inflation over the contract period.
This is Carillion's sixth PPP hospital in Canada. Carillion will invest some £28 million of equity in the project, giving it a 40% equity share in the joint venture. As a result, Carillion's share of the joint venture's revenue is expected to be approximately £500m over the life of the contract, at 2011 prices. In addition, Carillion will also be a member of the joint venture that will carry out the construction work and provide facilities management and life-cycle maintenance services over the 30-year concession period. These are expected to generate some £390m of revenue for Carillion at 2011 prices.
Construction will begin this summer for completion by summer 2015.