When is the Midland Met going to open? When did work on the Royal Liverpool hospital restart? Building tells you what we know about the pair of jobs that felled Carillion
When Carillion collapsed four schemes were blamed. A problem scheme in Qatar, the Aberdeen bypass and the Midland Metropolitan and Royal Liverpool Hospitals.
The three UK PFI schemes, the Royal Liverpool and Midland Metropolitan hospitals and the Aberdeen bypass scheme – blew a £375m hole in Carillion’s accounts when it announced a group-wide £845m writedown in July 2017.
Take a look at what we know about what went wrong at the two hospitals and when the new facilities might finally open.
When were the Midland Met and Royal Liverpool hospital due to open?
Talk about a moving deadline. Even before Carillion was forced into liquidation both of these schemes were well behind their original schedules. The Midland Met, which Carillion was appointed to build in 2015, was originally meant to open in October 2018, but in March 2017 the now defunct contractor announced it had been delayed by six months pusing it back to spring 2019.
The Royal Liverpool Hospital job, which Carillion won in 2013, was originally meant to open in 2017. The new 646-bed Royal Liverpool hospital was originally scheduled for handover by March 2017, Carillion revised this date to 28 February 2018 but in December 2017 told the Royal Liverpool and Broadgreen University Hospitals NHS Trust that it could not meet this date.
Who is going to build the Midland Met? Who will replace Carillion on the Royal Liverpool hospital?
No replacement for Carillion has been named for the Midland Met on a permanent basis. Balfour Beatty restarted work on the hospital in November under a £13m early works contract to “weatherproof the building and develop the design”.
Laing O’Rourke was chosen by the Royal Liverpool and Broadgreen University Hospitals NHS Trust to take on the Liverpool hospital scheme in October.
What are the problems on the projects?
At the Midland Met the main problems are being resolved by Balfour Beatty as they were largely created by the site lying dormant between 15 January and November.
The Royal Liverpool Hospital scheme is a different story. Both former Carillion boss Richard Howson and a review by engineer Arup revealed their were cracks in structural concrete beams. The same Arup review then went on to discover Carillion had fitted the wrong cladding to the building.
A timeline the Midland Met and Royal Liverpool hospitals
5 February 2019: In papers published ahead of a meeting of the board of Sandwell and West Birmingham Hospitals NHS trust, it’s revealed a decision on the main construction contract to complete the Midland Metropolitan hospital will be made in the coming months, with an appointment to be made in the summer.
29 January 2019: Board papers published ahead of a meeting of the board of the trust reveal costs to complete the Liverpool hospital look set to rise, admitting the amount of cash needed to finish the job been “underestimated”. Papers also reveal that Gleeds has taken over from Mace as project manager.
24 January 2019: Aidan Kehoe, chief executive at the Royal Liverpool and Broadgreen University Hospitals NHS trust, confirms he is leaving to take up the top job at the Hamad General Hospital in Doha, Qatar.
9 January 2019: The Sandwell and West Birmingham Hospitals NHS Trust starts the search for a replacement for Carillion to build the Midland Metropolitan Hospital – and attached a minimim £267m price tag to the job.
3 January 2019: Balfour Beatty and Kier tell the NHS trust behind the stalled Midland Met Hospital that they want their expected £1m bid costs to be paid for if they miss out on the deal to complete the work.
1 November 2018: In board papers published ahead of a board meeting the Sandwell and West Birmingham Hospitals NHS Trust said the risk of not being able to find a firm prepared to take over the Midland Met site next year was still significant.
26 October 2018: Laing O’Rourke confirmed as Carillion’s replacement on the Royal Liverpool project.
19 October 2018: An NAO report revealed the Department of Health lobbied to prevent independent watchdog the Major Projects Authority from having oversight over the hospital schemes stalled by the collapse of Carillion.
26 September 2018: The government agreed to fund the completion of the Liverpool hospital.
25 September 2018: The PFI agreement for the Royal Liverpool hospital was cancelled.
12 September 2018: The NHS trust behind the Liverpool project revealed cladding on the hospital did not meet the required standards and would need to be replaced.
29 August 2018: In its August update the trust behind the Liverpool hospital said it would take a year to complete the scheme once construction restarted, though gave no indication of when this might begin.
16 August 2018: The government confirms it will fund the Midland Met.
3 August 2018: The NHS trust behind the Midland Met officially votes for asking the government to bail the project out.
2 August 2018: A major contractor quoted between £319m and £424m to finish the Midland Met, according to a financial assessment by Deloitte.
1 August 2018: The NHS trust behind the Midland Met revealed it was set to ask government to bail the project out with trust chief executive Toby Lewis saying contractors’ appetite for completing it under a private finance contract without the trust taking on a greater share of risk was on the wane.
3 July 2018: Sandwell and West Birmingham Hospitals NHS Trust launched a search for an interim contractor to restart work on the Midland Met as it emerged the plan to have Skanska takeover from Carillion appeared to have been scrapped.
25 June 2018: The NHS trust overseeing the Royal Liverpool revealed a specialist cancer hospital being built by Laing O’Rourke next door to the stalled Royal project faced being caught up in the Carillion collapse. In a construction update, it said: “The [board] was informed that the delay to the new Royal could potentially have an impact on the construction of the Clatterbridge Cancer hospital site.”
8 June 2018: A consortium of five banks, including the European Investment Bank (EIB), that loaned the NHS trust £107m to pay for the construction work at the Midland Met pulled the funding.
7 June 2018: A National Audit Office report revealed Carillion was facing losses of £91m on Aberdeen Western Peripheral Route, £83m on the Royal Liverpool and another £48m on the Midland Met.
21 May 2018: The Royal Liverpool and Broadgreen University Hospitals NHS Trust submitted plans to get the new hospital back on track were being considered by health ministers.
20 April 2018: Toby Lewis, the chief executive of the Sandwell and West Birmingham NHS Trust, confirmed Skanska was the trust’s preferred bidder to takeover the Midland Met project.
22 February 2018: A director of the project client on the Royal Liverpool admitted that work to repair defective concrete beams had still not been completed.
6 February 2018: Royal Liverpool and Broadgreen University Hospitals NHS Trust chief executive Aidan Kehoe said Carillion’s collapse has caused a “significant delay” to the opening of the new £335m Royal Liverpool Hospital, saying it was unlikely to be finished this year.
6 February 2018: Fronting a select committee joint inquiry former chief executive Richard Howson revealed the issues that hit the much publicised problem job at the Royal Liverpool University Hospital, saying cracked structural beams were in part to blame.
24 January 2018: Kier boss Haydn Mursell said contractors would be ‘daft’ to step into Carillion contracts. He said: “Fundamentally, Carillion have said those contracts were loss-making, so it would be daft for any contractor to step into the same terms and conditions.”
15 January 2018: Carillion goes bust
May 2017: Carillion announced the Midland Metropolitan Hospital had been delayed by six months. The scheme at Smethwick was due to open in October 2018 but this was been pushed back until the following spring.
11 August 2015: Carillion appointed to build Midland Met. The contractor was left as the sole bidder for the PF2 hospital after the other shortlisted consortium, Laing O’Rourke-Interserve, dropped out of the bidding race in April of the same year.
How much is it all going to cost and who is going to fund the hospitals?
The Royal Liverpool Hospital originally had a £335m pricetag and was being funded by a private finance agreement with Legal & General and the European Investment Bank. It is now set to be funded by the government with the final cost yet to be revealed.
The Midland Met was originally worth £350m to Carillion. The NHS trust has revealed that it is set to cost them another £400m to complete the job and that Carillion had already been paid £205m.
Who is responsible for overseeing the two projects?
With the PFI agreements on both Royal Liverpool and Midland Met terminated, the two NHS trusts the Royal Liverpool and Broadgreen University Hospitals NHS Trust and Sandwell and West Birmingham Hospitals NHS Trust are now responsible for overseeing the schemes.
When are the Midland Met and Royal Liverpool hospital due to open?
The Royal Liverpool Hospital is now expected to open toward the end of 2020, around three years later than when Carillion was first appointed.
The Midland Met is set to open its doors in 2022 meaning it will likely be delayed by around four years when it is completed.