Developer pulls out of running for £353m Midland Metropolitan Hospital contract


Just one bidder left as Laing O’Rourke/Interserve follow Balfour Beatty in ditching plans to build new hospital

Plans for the creation of the new Midland Metropolitan Hospital have hit a stumbling block after it was revealed that developer, Laing O’Rourke/Interserve, has pulled out of the running for the £353m contract.

The decision to bow out of bidding for the latest PF2 project leaves Carillion as the sole company pitching for the project, just six months before last and final bids are due.

Balfour Beatty, which was originally picked for the shortlist, also pulled out of the running several months before the two remaining companies were announced.

But, despite the setback, Sandwell & West Birmingham NHS Trust has said it will stick to the agreed timetable for the tender.

Construction of the new 670-bed hospital is due to begin in 2016 and will be completed by 2019.

It will be located on a derelict former industrial estate in Smethwick, close to the boundary between Sandwell and Birmingham.

Planned at around eight storeys high, it will treat around 107,000 inpatients and 120,000 outpatients every year.

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The decision to pull out comes after Laing O’Rourke last month signed financial close on a £200m deal to build a new hospital in Dumfries under the Scottish government’s non-profit-distributing model. It is expected to draw further attention to perceived flaws in the PF2 procurement model, the English government’s replacement for the controversial PFI approach.