Government reconsiders scheme after Multiplex and Hochtief withdraw, leaving Ferrovial as sole bidder

The £300m Derriford PFI hospital scheme in Plymouth is at risk of being abandoned after two out of the three bidders on the shortlist pulled out.

The project, which is also knows as the Vanguard scheme, has been called in by the Treasury after consortiums headed by Multiplex and Hochtief withdrew their tenders.

It is understood that Multiplex dropped out in January because it had an ample workload in London and did not want to work in the South-west.

Hochtief’s Bonaventure consortium also pulled out last month, after apparently having difficulty finding suitable contractors to deliver the new-build and refurbishment work.

The only remaining contender is the Medico Vanguard consortium, led by Spanish firm Ferrovial. There are fears that if the scheme was allowed to go ahead with just this bidder, the lack of competition could lead to increased costs.

Sid Jameson, PFI project manager for the Plymouth Hospitals Trust, said the future of the project was now in the hands of the Department of Health, the National Audit Office and the Treasury, which are trying to decide whether to continue.

The worry is if they open the floodgates then more PFIs will have one bidder

Sid Jameson, Plymouth NHS Trust

Jameson said: “The big concern for the Treasury is, as with everything, value for money. They feel that the worry is if they open the floodgates then more PFIs will have one bidder.”

No English PFI scheme has gone ahead a this stage with single bidder, although it has in Scotland.

Jameson admitted that the project faces an uncertain future. “I’d like to think it’ll continue, but we’ll be back to square one if the government turns it down. We might have to repackage the scheme,” he said.

The PFI involves the building of a new elective surgery and outpatient centre, as well as refurbishing a large part of the existing Derriford hospital.

It is the largest hospital scheme in the West Country.