Skanska Innisfree achieve contract close on major PFI teaching hospital

Press release 28/11/2002 00:00 CET

Construction of one of the UK’s biggest hospitals under PFI has been given the green light after a consortium led by Skanska and Innisfree achieved contract signature on the project. Skanska Construction is responsible for the new hospital’s construction and hard FM services, which has a combined contract value of £484 million.

The consortium will finance, design, build, equip, maintain and operate a new 1212–bed acute hospital and a clinical sciences teaching and research facility at Walsgrave for University Hospitals Coventry and Warwickshire NHS Trust. In addition, the local health community will provide a number of intermediate care places. The consortium will also provide a 130-bed mental health unit for Coventry Primary Care Trust on the same site.

The project heralds a new era in healthcare for the City and surrounding counties by consolidating the Walsgrave and Coventry and Warwickshire hospitals into a single, state-of-the-art development, including teaching and research facilities.

David Roberts, University Hospitals Coventry & Warwickshire NHS Trust chief executive said, “We are delighted that the contract has been signed and we look forward to working in partnership with Skanska Innisfree to give the people of Coventry and Warwickshire the brand new hospital they deserve.”

Innisfree and Skanska are providing investment capital with Health Care Projects managing the overall project, which is being financed by a £372 m index-linked bond guaranteed by MBIA and underwritten by BNP Paribas.

Skanska Construction has been awarded the design and build contract worth £334 million in a joint venture with Skanska Rashleigh Weatherfoil, which will install building services and IT infrastructure. All acute services are housed in one building, which was a major factor in Skanska’s successful design solution. Project architect is Nightingale Associates.

When the hospital opens in 2006, Skanska will provide hard FM over the 35-year concession period in a contract worth in the region of £150 million, generating a long-term revenue stream for the company, with ISS Mediclean providing soft FM services. GE Medical Systems will procure, install and maintain medical equipment. Among the consortium's partners is Gentian, experienced provider of retail environments in NHS hospitals.

David Fison, Skanska Construction chief executive, said, “Skanska’s design and build skills will deliver a superb modern healthcare facility for the people of Coventry and Warwickshire.

“The company will play an integral part in the hospital as contractor, hard FM provider and project investor and we look forward to a successful long-term relationship with University Hospitals Coventry and Warwickshire NHS Trust and Coventry Primary Care Trust.”

Investec European Capital has provided financial advice and the consortium’s legal advisers are CMS Cameron McKenna and Clifford Chance.

During the five-year construction period, Skanska will ensure that both Trusts’ services operate as normal before finally demolishing the existing acute and mental health hospitals to make way for landscaped car parking and staff residences.

Care for the environment is a big issue. One technique Skanska is bringing from its previous PFI projects is the reuse of earth excavated from site, which will be remediated and used in the new hospital’s foundations. This avoids the need for lorries to remove the earth from site.

Skanska has also devised a solution to ensure parking capacity remains the same throughout construction. Cars will be able to park at a nearby cinema complex with special buses taking NHS staff to and from the hospitals, leaving on-site parking spaces for patients and essential staff.

Ray Pett, project director of the consortium’s project company, The Coventry and Rugby Hospital Company PLC, said: “This consortium brings together a first-class level of expertise and experience in the PFI healthcare sector, dedicated to high-quality service delivery.”