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Carillion Update

Aidan Kehoe, chief executive at the Trust said,

“A small number of workers have returned to the new Royal and given the circumstances very little construction work is taking place at present.

"The Hospital Company (Liverpool) have confirmed to sub-contractors that they will be paid for their work from 15 January until the end of their contract. Any money owed from Carillion for work prior to this is subject to insolvency proceedings and discussions are underway between sub-contractors and PwC. The Trust appreciates that this is an extremely worrying time for those sub-contractors and Carillion staff and we hope that they will be supported as much as possible."

Handover of the new Royal has already been delayed. We expect that the liquidation of Carillion will add to that delay, although the Hospital Company is doing all that it can to minimise any further disruption.”

 

Notes to Editors:

The Hospital Company (Liverpool) is a private sector consortium that was established to deliver the new Royal Liverpool University Hospital and is responsible for ensuring it is completed. As part of this arrangement, The Hospital Company (Liverpool) has contracted with Carillion for its construction.

Completing for the new Royal:

We want to reassure people that the new Royal will be built and the Hospital Company has a range of options and contingency plans that are being implemented, now that Carillion have gone into liquidation.

The Hospital Company which is contracted to deliver the project is empowered to terminate existing contracts and engage a new contractor to complete construction. They also have access to insurance funds to enable it to complete the project.

 

Hard FM services:

The Hospital Company has plans to arrange for a new company to be established that Facilities Management workers will be transferred to. Should there be any delay in arranging this, we will transfer these staff to our own internal agency, so that work can continue and staff can continue to be paid.

 

Paying for the new Royal:

The agreed fee for construction of the new Royal is £335m. This figure, as well as the timescale for repayments, is fixed.

Any addition costs due to remedial works, or costs incurred by the overrunning of the project are not met by the Trust.

Also, the Trust will not start making the Unitary Payment (annual repayment costs) for the hospital until it takes handover and the building’s completion has been confirmed by the independent tester.

So while this handover is deferred the overall cost to the Trust will be less.


Construction delays

The new Royal was originally scheduled for handover by March 2017. Carillion revised this date to 28 February 2018 and in December 2017 told the Trust it could not meet this date. The new date for handover has not yet been provided to the Trust.

Delays have been due to extensive asbestos in the ground that required removal and issues with cracks in beams that required substantial remedial works. Works to remedy these have been covered by Carillion not the Trust.

 

For more information email communications@rlbuht.nhs.uk