Skanska has won a £250m PFI contract to extend the City Hospital in Derby.
A consortium led by the contractor and funder Innisfree was selected for the project on Monday, beating off a Kier/Alfred McAlpine/ Interserve team.

The project was delayed earlier this year by a dispute between the government and public services union Unison over employment terms for ancillary hospital workers such as cleaner and porters. Six bidders were originally shortlisted for the scheme in October 2000 and the scheme was due to go on site this May.

Client Southern Derbyshire Acute Hospitals NHS Trusts plans to build an acute hospital and specialist care diagnostics centre on the City Hospital site. It will combine units from the City Hospital and the nearby Derbyshire Royal Infirmary. The infirmary site will be turned into a community facility centre for the city.

The consortium said it expected to reach financial close next spring and complete construction by the end of 2008. The team also includes multidisciplinary consultant Capita.

n Three contractors – Gleeson, Taylor Woodrow and Laing O'Rourke – have been shortlisted for a £27m health job in Wolverhampton. The three are vying to build a cardiac centre at New Cross Hospital for the Royal Wolverhampton NHS Trust.