Balfour Beatty set for Midland Met finishing deal

Aaron Morby 3 years ago
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Balfour Beatty looks set to seal the deal to complete Carillion’s Midlands Metropolitan Hospital within the £267m finishing budget.

Balfour Beatty is presently on site under a £9m care and maintenance early work deal
Balfour Beatty is presently on site under a £9m care and maintenance early work deal

The firm is the sole bidder for the project and is in competitive dialogue with Sandwell and West Birmingham Hospitals NHS trust.

The Trust board has revealed that negotiations are progressing well and, despite not yet having a compliant bid, were expected to conclude in May.

This would allow a preferred replacement contractor deal to be signed in June with a final contract agreed by August.

If the deal is finalised, Balfour Beatty would complete construction of the hospital by December 2021, enabling it to become operational by May 2022.

The Midland Metropolitan Hospital was originally procured under a PF2 contract with Carillion in December 2015 but work halted when the contractor collapsed in January 2018.

Under the terms of a new publicly funded design and build deal, the contractor will assume risk for completion, with the exception of certain works.

Balfour would be paid for the cost of the works completed, not the target price. Any savings on the target price would be shared with the trust as a ‘gain share’ to incentivise the bidder to deliver best value.

The trust plans to hold £38m as a contingency against any unforeseen costs deemed to be out of the scope of the contract.

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