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Wed September 26 2018

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Laing O’Rourke agrees deal for completion of loss-making ‘super hospital’

2 Jan Laing O’Rourke has finalised a deal for completion of a major Montreal hospital that has brought it significant financial losses.

Canadian contractor Pomerleau will replace the Construction Santé Montréal (CSM) consortium that includes Laing O’Rourke on the CA$400m remaining stage of the project. Stage 1 of the ‘super hospital’ was handed over by CSM during 2017. The aim in handing over the construction is to minimise further risk.

Laing O’Rourke group chief executive Ray O’Rourke said in a statement on 22 December: “I am pleased to confirm that, as part of Construction Santé Montréal - the delivery JV made up of Laing O’Rourke and Obrascon Huarte Lain (OHL) - we have finalised a deal whereby Quebec-based Tier One contractor, Pomerleau, engages as principal contractor to deliver Phase 2 of the CHUM (Centre hospitalier de l’Université de Montréal) project in Montreal, Canada.”

He added: “We have regularly reported that the project has resulted in significant financial losses for the Laing O’Rourke Group, and minimising further risk on Phase 2 has been a priority.”

Pomerleau is the principal contractor tasked with delivering the second phase of CHUM and has already been working with the Laing O’Rourke team on dismantling the old St-Luc Hospital site on which Phase 2 sits. The demolition work is scheduled to take approximately one year. 

The second phase consists of outpatient services, clinical and administrative offices, as well as an amphitheatre and parking lots. “We will be maintaining a Laing O’Rourke team in Montreal, as part of CSM, ensuring that Phase 1 continues to run smoothly through the handover period and monitoring Pomerleau’s progress on the Phase 2 programme through to completion of the contract,” said O’Rourke.

“Our teams have worked tirelessly to deliver on the commitment to construct one of the world’s largest and most complex medical precincts, handing over Phase 1 of the CHUM earlier this year [2017],” he said. Full patient transfer was successfully completed in October 2017.

“We enter this next stage with that same commitment and diligence across our teams in providing the city of Montreal with a truly remarkable healthcare project,” he said. “Successful execution of this transaction will now allow us to finalise our FY17 year-end accounts (31st March 2017), which we expect to file at Companies House at the end of January 2018.”

O’Rourke said that he could confirm that the FY17 Group results show a profit before JVs and exceptionals, and that he could further confirm that FY18 year-to-date results show a further improvement in the profitability of the core UK business.


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