Latest accounts for Sir Robert McAlpine Holdings, which cover the group’s contracting activities, show the firm is nursing big losses from its joint venture contract to build a £176m hospital in Bermuda.

McAlpine confirmed it has suffered “severe problems with design and performance resulting in a substantial loss”, which it has been unable to absorb without cash assistance from the group.

The firm said it had taken a conservative view of the outcome of Bermuda’s King Edward VII Memorial Hospital project, although its BCM McAlpine joint venture has lodged significant claims, which have not been taken into account.

The contractor said it was focussed on finishing the project in June,  which is the Caribbean island’s first public private partnership project.

Pre-tax losses plunged to £37.7m from a  £19.2m profit the year before on turnover up 15% to £810m.

McAlpine has booked a total loss of £41m on the hospital project.

The contractor said the UK construction market remained highly competitive and price driven, but several big contract wins would deliver an improved performance over the next  two years.

These included the new US Embassy and Riverwalk House in London, the North east priority schools batch and City of Glasgow college project.

McAlpine said it had also expanded its construction management activities, working closely with the Crown Estate, Stanhope and continuing progress on its major Bloomberg office project.

Meanwhile, Newarthill accounts, which cover all McAlpine family construction, lucrative PPP concessions and property interests including subsidiary Sir Robert McAlpine Holdings, reported pre-tax profits had fallen to £5.9m from £20.5m in 2012. 

This included  £25m cash proceeds and a £37m profit from the sale of Dudley Hospital and Dundee schools PFI assets.