Government to bail out Carillion’s Liverpool hospital; Laing O’Rourke in frame to finish it

The UK government will now pay to complete Liverpool’s new £335m hospital, which Carillion was building when it collapsed in January, making it an old-style public project rather than a private-finance scheme, according to an unconfirmed report.

Separately, UK contractor Laing O’Rourke has been tipped as the contractor who will finish it.

Ministers will say "within days" that they will be terminating the Royal Liverpool University Hospital (RLUH) private finance initiative (PFI) deal and taking it into full public ownership, Sky News reported last night.

The trust responsible for the long-delayed RLUH was due to hold a board meeting today, raising the possibility of a coinciding government statement, said Sky.

Earlier this month, consulting engineer Arup discovered that Carillion had installed the wrong cladding, which could push the cost of finishing RLUH beyond what its financiers would be willing to pay.

PFI contracts for the project are due to expire by the end of the month, meaning the announcement has to be made by the weekend, industry sources told Sky.

As GCR reported, the preference of the Royal Liverpool and Broadgreen University Hospitals NHS Trust had been to continue the PFI arrangement with financiers, the European Investment Bank and Legal & General pensions, because negotiating an end to the PFI deal would be complex and time consuming.

But the unknown cost of replacing the cladding, combined with the job of fixing cracks in concrete beams, made the continuation of the PFI deal uncertain.

Sky said health secretary Matthew Hancock had ordered officials to end the impasse.

Separately, UK magazine Building reports that major contractor Laing O’Rourke is being lined up to take Carillion’s place on the project, which was meant to be finished last year.

The Treasury declined Sky’s request for comment, and the Department of Health and Social Care said only: "We are committed to getting the new Royal Liverpool Hospital built as quickly as possible for the benefit of patients across Merseyside."

Image: The new buildings of the Royal Liverpool University Hospital in October 2017 (Rodhullandemu/Wikimedia Commons)

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