Some PFI projects may have the luxury of a brand-new site but I suspect that most face different circumstances. Hospital redevelopments often involve a congested site where a Victorian core has been added to over the years, resulting in a chaotic system of interconnected buildings in various stages of dilapidation. The project may involve some demolition, the transfer of services to other parts of the site and the building of facilities that are slotted into available space.
The NHS PFI form tries to standardise many issues that caused considerable debate on the early PFI contracts, and thereby lengthened the negotiating period. Standardisation of contractual issues can, however, go only so far. There will always be an element of any PFI project that is specific to that scheme. Broadly, this will concern the construction operations.
Beyond that, the fact that many projects will not be on a greenfield site means that there are construction-related matters that are, strictly speaking, outside the scope of the NHS standard form, but have to be considered.
These include the nature and extent of any associated construction works necessary to enable the main PFI scheme to proceed, and the refurbishment or maintenance of existing buildings. The impact of carrying out works on existing facilities that are being used during the building process must also be taken into account.
The first issue is that of associated works needed to facilitate the main scheme. Before starting the main PFI scheme, it may be necessary to refurbish some facilities or even construct new ones to permit transfer of services out of premises due to be demolished or refurbished. Hospitals on congested sites often face this sort of log-jam, where it is impossible to move one service without having to move several others and lack of space means there is nowhere to move them unless new facilities are constructed ahead of the main scheme.
There is no particular difficulty in dealing with this as a standalone construction project, and the estates department in any well-run hospital will deal with such projects as a matter of course.
The real issue to consider is the potential effect of these works on the PFI scheme. Even if the works can be completed before the PFI scheme commences, what happens if they are defective and this has an effect on the contractor carrying out the PFI contract? To protect the PFI contractor and the NHS trust, it is necessary to consider whether, for example, some form of warranty should be offered by the associated works contractor to the PFI contractor. How far should such a warranty extend? Should the relevant professional team also provide one? Is this a concept with which those carrying out the associated works will be prepared to agree? The refurbishment and maintenance of existing buildings is another common issue. Again, there are more questions than answers, but the main concerns centre on the condition to which the private sector should bring such buildings and in what time. It is often considered that existing buildings should be brought up to "category B" – a carefully defined term that broadly means "sound, operationally safe, complying with the relevant statutory codes and exhibiting only minor deterioration". The cost of such refurbishment is often crucial to the overall project cost and the time these works take can be a matter of debate.
Careful consideration must be given to how these issues are incorporated in the project agreement itself.
In addition, given that many potential problems relate to the interface between various elements of work and the PFI project itself, the relief events in clause 42 of the standard form may not be adequate. It says in a footnote that, with NHS executive approval, certain specific events can be added to the list. It may be worth considering a relief event to deal with the scenario where, for example, works are being carried out close to existing operational facilities that may have an effect on the progress of the works themselves.
Postscript
Simon Lewis is a partner at solicitor Dickinson Dees in Newcastle upon Tyne.
