Northern hospital deals signal "spurt" in PFI contracts

13 Aug 98

The government's success in driving forward the Private Finance Initiative in the health sector was underlined this week with the signing of two further large contracts worth around £190m.

14 August 1998

A 614-bed hospital will be built in Halifax, west Yorkshire. The new hospital has been developed between Calderdale Healthcare trust and the private sector consortium, Catalyst Healthcare (Calderdale) plc. Building work on the new £76m hospital will start later this summer on the site of the Halifax General Hospital. It will open in 2001.

On the other side of the Pennines, a deal at South Manchester University Hospitals Trust was inked on Thursday after Public Finance went to press. In all, ten major acute NHS private finance schemes worth £800m have been agreed since Labour came to power in May last year. Both projects are part of the largest hospital building programme in the NHS's history, totalling £2.2bn of investment.

The healthy state of using the PFI for hospitals contrasts greatly with the use of PFI in other sectors.

The Halifax development will bring together acute hospital services previously provided from three other local sites. The trust's accident and emergency department is currently at the Royal Halifax Infirmary, while the coronary care unit is stationed in Halifax General Hospital.

The maternity unit and the children's services are based at Halifax General Hospital, but the surgical paediatric ward is at the Royal Halifax Infirmary. Paediatricians have to travel between the two sites.

Health minister Alan Milburn said: 'The new hospital in Calderdale is part of the government's programme to modernise the National Health Service. It will provide the best new facilities for patients, and give NHS staff the best environment to deliver high-quality care.'

The Calderdale contract will last 60 years, though the trust has an option to terminate after 30 years. Catalyst Healthcare is a consortium of construction company Bovis, RCO Holdings plc, British Linen Bank and the French bank Société Générale. RCO will provide cleaning and non-clinical support services.

The South Manchester scheme is worth £113m and will be the largest-ever hospital development in the north-west of England. Work on the 319-bed acute hospital and 77-bed mental health unit will begin soon, and public funds will be provided to renovate existing buildings.

The trust's private sector partner is a consortium of architects WS Atkins, the building firm Alfred McAlpine, non-clinical service providers Gardner Merchant, and Innisfree, the equity fund dedicated to PFI.


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