Hospital Trust controls purse strings as work re-starts on £335m building project

Work is starting to resume on the new £335m Royal Liverpool Hospital after months of delays following the collapse of construction giant Carillion in January with debts of £1.5bn.

Last month property group Laing O’Rourke was appointed as management contractor on the project.

But the Royal Liverpool Hospital Trust has revealed that it will be responsible for paying Laing O’Rourke’s specialist trade contractors direct.

Around 140 contractors are believed to be involved in the 646-bed project which was originally supposed to complete in March 2017.

The trust’s November 27  board meeting will hear that consultancy and construction firm Mace has been drafted in to oversee the project and manage risk for the trust after Laing O’Rourke said it would not take responsibility for cost or hand-over date as part of its re-start deal.

Trust chief executive Aidan Kehoe told trade publication Construction Enquirer: “Laing O’Rourke was not prepared to take any risk on either construction cost or timetable to complete – these risks sit with the trust which we will manage through Mace and the in-house project team.”

Mr Keho explains in board meeting papers: “One key safeguard going forward is that the trust will make payments to Laing O’Rourke’s subcontractors directly.

“This means that should the same situation befall Laing O’Rourke as it did Carillion, then the trust would simply look to appoint a new contract manager.

“Sub-contractors would continue to work and get paid as normal.

“Whilst some delay may be inevitable, the sub-contractors would be kept whole and there would be no risk to the project being completed.”

Laing O’Rourke has already started some minor works.

It will provide a detailed construction programme in the New Year, setting out a timescale for handover towards the end of 2020.