A contract for Balfour Beatty to resume the construction of the Midland Met hospital, which stalled after the collapse of Carillion, still hasn’t been signed as government officials try to resolve a “discrepancy” over the projects financing.
The Sandwell and West Birmingham Hospitals NHS Trust had originally hoped to reach commercial close for the deal by the end of October in the hope of getting Balfour on site before the end of this year. That was then revised to the end of November.
In board papers ahead of a meeting tomorrow, the Trust warned that the contract would now need to be completed within days in order to restart on site before the end of 2019.
It agreed and signed a memorandum of understanding with Balfour Beatty at the end of November which stipulated that the contractor would start on site in December. Meanwhile Engie has been awarded a hard FM contract to support the build, which will be executed when the construction contract is signed.
But the Trust said it still had to “resolve the discrepancy between the agreed final business case for Midland Met and NHS Improvement/NHS England’s financial improvement trajectories issued in the days shortly before approval”.
It added: “It will not be possible to proceed nor sign a contract until that discrepancy is resolved. The Trust has been raising this matter for six weeks, and the involvement of national officials has now been secured to ensure that the options are all considered and one selected.”
Nonetheless, the Trust said it saw “no obvious reasons” why a contract could not be signed within the next two weeks. “We would hope the extra time taken has assisted Balfour and others to ensure that start on site proceeds with pace,” it added.
The report indicated that Balfour Beatty’s teams were in place with their supply chains to mobilise, along with the NEC 4 project management function through Gleeds.
