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| NEWS | By SUNITA RAPPAI |
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THE Whittington Hospital’s £30m PFI rebuilding plan has ground to a halt because the company chosen to do the work has run out of cash. Jarvis – the troubled construction and engineering firm – won the contract to design, build and maintain a new wing of the Highgate hospital under the Private Finance Initiative in October 2002. The new facilities were urgently needed to replace ramshackle Victorian-built wings – and Jarvis was chosen ahead of two other companies under the controversial PFI agreement. PFI means the building and management of the NHS hospital is handed over to a private company for a set number of years while the NHS stumps up funds to pay for it. The Whittington deal was due to run for 30 years. But the company, chaired by defeated Tory mayoral candidate Steven Norris, has been beset by cash problems. It was forced to sell its PFI bidding arm to a German company last week and on Monday Jarvis admitted it could go bust by the end of the month if it does not secure new money. The firm currently has debts of some £240m – more than ten times its market value – and is trying to raise £25m from the sale or lease of 44 properties, including headquarters in York and London. A Jarvis spokesman confirmed work had stopped on several of its sites, including the Whittington, while the group seeks fresh capital or partners. The building, which is currently six months behind schedule, will include an urgently needed new labour unit, operating theatres and clinics. The hospital now says it does not expect it to be open before next summer at the earliest. Susan Sorensen, the Trust’s finance director, defended the decision to use PFI funding, claiming the trust was better protected under PFI as any risk was passed to the banks. She said: “At the time Jarvis was a successful company and offered the best value for money of our shortlist. “We have been monitoring the position closely. We have been aware of Jarvis’s financial position and are managing the situation as best we can with regular site visits and meetings. “Building contractors running into difficulties is surprisingly common and could have happened under any sort of contract. “If Jarvis went bust – which is not thought likely – the bank providing the funding is legally obliged to find an alternative contractor.” Professor Alyson Pollock, head of public policy research at the University College London and a health service policy expert, warned Jarvis would be entitled to compensation from the public purse if the PFI scheme collapsed. She said: “They are entitled to take back compensation at market value for their investment and they will leave the hospital to negotiate a way out with the private sector – who have them over a barrel.” Tim Gosling, a researcher at the think tank Institute of Public Policy Research said: “It is up to the debt provider – the Bank of Scotland – to find an alternative partner. “If the company collapses there will be a delicate and not particularly easy negotiating process while the deal is re-established.” And residents who live opposite the hospital are resigned to another year of noise and mess. Tenants in Salisbury Walk, Magdala Avenue – where the new wing’s entrance will be sited – are furious about further delays. One man, who did not want to be named because he works for the Whittington, said the work stopping had given him and his neighbours a welcome rest from the dust and noise – but now they were worried how it would affect patients. He said: “They were taking so long we’d almost got used to having lorries trundling past at 7.30 in the morning and having all the noise and dirt. “But suddenly it all went quiet and there were just a couple of people looking after the site with no work going on.” June Cornish, chairwoman of the Girdlestone Walk Residents’ Association said: “It will be another summer of all the mess, the dust from the lorries and us cleaning our windows regularly because of all the dirt.” Another resident, whose kitchen window overlooks the hospital’s mortuary, said: “The lorries make funeral cars queue up to collect bodies, which a bit unnerving.” |
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