Morrison Construction wins health PPP project in Scotland

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Morrison Construction wins health PPP project in Scotland

Galliford Try plc recently announced that its Morrison Construction business has been appointed preferred contractor by Hub South East Scotland Ltd on behalf of NHS Lothian for the design build finance and maintain (DBFM) of the new East Lothian Community Hospital in Haddington, East Lothian, Scotland.

The investment value of the project is estimated at £72 million (US$110.2 million).

At the same time, Galliford Try's Facilities Management business has been appointed preferred bidder to provide ongoing hard facilities maintenance and lifecycle management to the East Lothian Community Hospital. This contract will be worth approximately £32 million over the 25-year period. In addition to this, Galliford Try Investments will also be investing and providing management services to the company which will be set up to fund the project.

This project is to be delivered through Non-Profit Distributing (NPD) funding, under the hub model. In light of the recent opinion by the Office for National Statistics on the Aberdeen Western Peripheral Route, another NPD project, the Scottish Government is considering whether further changes are required to the hub model so that the projects don't compute to the national budget because the Government has too much control over them.

The government-backed Scottish Futures Trust (SFT) had originally estimated that the project would reach financial close in August 2016, with construction to be completed by December 2019. However, Scotland's deputy first minister John Swinney in September confirmed that none of NPD projects would be able to reach financial close before this issue is resolved.

Morrison Construction will deliver a new state-of-the-art circa 23,000 sqm community hospital on the existing Roodlands Campus located in Haddington, East Lothian. When operational, the facility will provide a range of community based services to include; day surgery, mental health inpatient beds, medicine of the elderly, pharmacy and a number of other community-based treatment services.

Peter Truscott, Chief Executive of Galliford Try, said:

"We are delighted to have been selected by Hub South East Scotland for this major project in Haddington. This appointment demonstrates the capabilities of our combined offering across construction, facilities management and investments and we look forward to working with Hub South East Scotland and NHS Lothian to create the top class facilities the local public deserve."

Pinsent Masons is legal advisor and Deloitte is financial advisor to Hub South East Scotland for the project.

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