Two consortiums have been shortlisted for a £127m PFI hospital in Colchester, Essex.

PFI specialist Laing and support services firm Amec are spearheading the rival bids for the scheme, which involves consolidating six health facilities at a single site.

A spokesperson for the Essex Rivers Healthcare NHS Trust said that a preferred bidder would be selected by the end of the year.

The spokesperson said: “We are in the process of selecting a preferred bidder from the final two. We hope to pick one in the next couple of months.”

The spokesperson added that the selected consortium would be expected to reach financial close by the end of June next year.

The project will involve the centralisation and reconfiguration of acute health services at Colchester General Hospital, Essex County Hospital, Severalls Hospital and three other sites.

The scheme will include the demolition of Essex County Hospital, which has treated patients since 1820 and is located in the town centre.

In a multimillion pound plan formulated by the trust, the county hospital’s services will be transferred to the Colchester General Hospital site. The trust also expects services at Severalls Hospital, in the north of the town, to be transferred to a facility at the general hospital.

Building work is expected to begin next September. The NHS trust aims to complete the project by 2009/10. The maintenance period is 30 years.