New team makes Dudley shortlist despite collapse of merger talks.
A Bovis/WS Atkins joint venture has been shortlisted for its first private finance initiative project since the two firms called off merger talks late last year.

Bovis and Atkins, which promised to work together after failing to agree merger terms, have prequalified along with and five other consortia for a £68m PFI hospital at Dudley, West Midlands.

Alfred McAlpine, which Atkins worked with on the first round PFI hospitals at Hereford and Wythenshawe, Manchester, is also shortlisted. Its partner at Dudley is facilities manager Gardiner Merchant.

Atkins chief executive Mike Jeffries and Alfred McAlpine both declined to say why the firms decided not to work together on the second round of schemes. The new Bovis/Atkins team is joined by French bank Societé Générale and facilities management provider RCO.

The other shortlisted teams also have different members from those that bid in the first round of PFI hospital deals.

Laing has teamed up with its new FM joint-venture partner Hyder and its former FM partner Serco to launch a three-pronged attack.

Sir Robert McAlpine, with British Linen Bank, is in a consortium with Building & Property, the FM provider formerly owned by Amec.

Amec and B&P worked together on a string of earlier hospital deals but Amec appears on the Dudley shortlist with Balfour Beatty. It is using Balfour's Haden and its own in-house FM expertise.

The sixth team is more familiar, with equity funder Innisfree teaming up with Kvaerner, which it worked with on a completed first-round deal in Greenwich, south-east London.

Paul Brennan, NHS trust project manager at the Dudley Group of Hospitals, said the project will be carried out in accordance with new government guidelines that are intended to get better value for money from the PFI.

The shortlist will be cut to three, then two, and bidders will need to have all the "main characteristics" of their deals in place when they make best and final offers.

The government is concerned that in the first round of deals preferred bidders identified at an early stage were able to change the terms of their deal from a strong position. It also plans to impose greater penalties on contractors that fail to keep hospitals functioning properly.

Whereas in the first round a firm might lose 30% of its monthly payment for running a hospital if an operating theatre was out of action, in the second round of schemes this penalty could double. Details of the penalties at Dudley are expected to be in an invitation to tender to be issued within a fortnight.