NHS trust rethinks PFI procurement route after it ‘stands down’ sole bidder for £350m east London hospital

French contractor Bouygues’ bid for the £350m Whipps Cross hospital development in east London has finally been scrapped after a Treasury review.

The Bouygues consortium had been left as the sole bidder for the scheme after Consort, a Balfour Beatty-led consortium, pulled out of the bidding in April. This forced the Treasury to look again at the use of the PFI to procure the hospital.

The Whipps Cross Trust is thought to have abandoned the existing procurement process because it needs to have a facility in place for the 2012 Olympics. And industry insiders say it is not certain that the hospital will proceed as a PFI scheme. One added that any new scheme was likely to be worth only about £100m.

The move will renew calls for the PFI process to be reformed so that contractors do not waste millions putting together bids.

Lucy Moore, the trust’s chief executive, said the decision had been prompted by Balfour Beatty’s withdrawal and changes in healthcare practice.

She said: “Following the withdrawal earlier this year of PFI bidder Consort, the trust saw an opportunity to reflect a number of changes within the NHS and evaluate new options for the redevelopment of the hospital site.

The hospital will be reduced in size and may not be procured using PFI
The hospital will be reduced in size and may not be procured using PFI

The trust saw an opportunity to reflect changes within the NHS

Lucy Moore, Whipps Cross trust

“Since then we developed and expanded various options and have decided a phased approach using purpose-built modular facilities is the best all-round fit.”

She added: “We have stood down the remaining PFI bidder Bouygues and are pursuing the production of an outline business case.”

The trust admitted that not all of the hospital will be financed by PFI, but added: “Whipps Cross University Hospital NHS Trust is currently looking at its funding options but it is expected that the most of the scheme will be paid for under a PFI.”

Ian Gunter, Bouygues’ business development manager, refused to be drawn on whether the contractor would pursue the trust and the government for compensation for its bidding costs.

He added: “Obviously in 2006 we will have to review our options on whether to proceed with the Whipps Cross scheme. It will depend on resources and other market opportunities.”