Trust says O’Rourke was “not prepared to take any risk” on the job
Mace has been called in to help complete the new Liverpool hospital stalled by Carillion’s collapse, according to the NHS trust behind the scheme.
In October the Royal Liverpool and Broadgreen Hospitals NHS Trust confirmed Laing O’Rourke would manage the construction contract of the Royal Liverpool Hospital (pictured) but new documents reveal Mace has also been brought in to get the £350m project back on track.
In public board papers published ahead of tomorrow’s meeting of the trust’s board it was revealed that Mace had been brought in to help manage the risk associated with the scheme – and that O’Rourke was “not prepared to take any risk” on the job.
The papers said: “The agreement with Laing O’Rourke is such that they will have a very different set of responsibilities to those carried by Carillion.
“Laing O’Rourke was not prepared to take any risk on either construction cost or timetable to complete – these risks sit with the Trust which we will manage this through Mace and the in-house project team.”
Mace is acting as the project manager, contract administrator and cost advisor.
The papers also revealed that Laing O’Rourke, which is also building the neighbouring Clatterbridge Cancer Centre, had already started work on site.
Aidan Kehoe, the trust’s chief executive, said: “After such a challenging and turbulent time over the last 11 months, we are glad to see work begin back on the site and we are looking forward to the New Year with fresh optimism.
“With Laing O’Rourke and others in place, more contractors to follow in the coming months and work returning to the site, our staff are now refocusing their attention on our plans for moving in.”
The trust revealed the contractor had commenced some minor early works and that the main construction work will start early in the New Year.
Andy Thomson, Laing O’Rourke’s project director who also led the delivery of the new Alder Hey Children’s hospital, said: “The team is now mobilising with important early work already underway. The pace of delivery will grow in the New Year and all involved are energised and committed to completing the new Royal for the people of Liverpool.”
In an effort to protect itself from another Carillion-style collapse, the trust has also revealed that it will be making payments directly to Laing O’Rourke’s sub-contractors.
In his executive summary, Kehoe said: “This means that should the same situation befall Laing O’Rourke as it did Carillion, then the Trust would simply look to appoint a new contract manager. Sub-contractors would continue to work and get paid as normal.
“While some delay may be inevitable, the sub-contractors would be kept whole and there would be no risk to the project being completed.”
The trust also made mention of the principal funders of the PFI arrangement that was scrapped, Legal & General and the European Investment Bank, saying they had “taken considerable losses on their original investment”.
It said: “All parties have worked extremely hard to resolve the issues caused by Carillion, and the lenders… have shown tremendous goodwill in reaching a final solution.”
The trust said the termination agreement provided “significant savings to the public sector and represents good value for money for the taxpayer”.
Mace has all been contacted for comment.