Work to restart on stalled Carillion hospital job next month

Work is set to restart next month on one of the hospital schemes stalled by Carillion’s collapse earlier this year.

An early works contractor is set to be on the job at the Midland Metropolitan Hospital from 11 September.

In a contract notice published to the Official Journal of the European Union, the Sandwell and West Birmingham Hospitals NHS Trust confirmed it was looking to get work on the scheme – which has been inactive since 15 January, the day Carillion went bust – restarted as soon as possible.

The trust said: "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 trust said the full scope of works required was not yet known, and the value of the contract was anticipated to be between £13m and £20m. The duration of the scheme is intended to run until the end of May next year but it may be extended by mutual agreement for a further period of up to six months.

Contractors looking to bid for the project need to generate turnover of at least £80m and firms have until 23 August to express interest in the job.

The contract notice also laid out a number of jobs that would be carried out by exisiting subcontractors including Prater, which is set to resume general envelope works and plantroom cladding.

Last week, the trust voted in favour of asking the government to bailout the project after the industry’s aversion to completing the project under a new PF2 arrangement was highlighted in a financial assessment report from Deloitte published ahead of the meeting.

As part of the assessment an unnamed major contractor quoted between £319m and £424m to finish the hospital job.

The contractor’s £319m price tag was based on the job being completed under a straight construction contract. If the project was to be let under a new PF2 deal the cost to complete the building would have risen to £424m.