Carillion closes contract on £1.7bn Canada project
WOLVERHAMPTON-based support services plc Carillion has achieved financial close on a £1.7bn public/private partnership hospital project in Canada.
The firm said today its joint venture ‘Hospital Infrastructure Partners’ had finalised the deal to build a new replacement Oakville Hospital, in Ontario.
This follows June’s announcement that Infrastructure Ontario and Halton Healthcare Services had selected Hospital Infrastructure Partners as its preferred bidder to finance, design, build and provide facilities management and life-cycle maintenance services for the new hospital.
The project will be delivered using the alternative financing and procurement model, which is similar to the UK’s public/private partnership model.
The 30-year contract is expected to be worth around £1.3bn at 2011 prices and £1.7bn after taking into account indexation for anticipated price inflation over the contract period.
This is Carillion’s sixth public/private partnership hospital in Canada and it will invest some £28m of equity in the project, giving the company a 40% equity share in the JV.
As a result, the plc’s share of the JV revenue is expected to be approximately £500m over the life of the contract at 2011 prices.
It will also be a member of the JV which will carry out the construction work and provide facilities management and life-cycle maintenance services over the 30-year concession period.
Together these were expected to generate around £390m of revenue for Carillion at 2011 prices, it said.
Construction will begin shortly and is expected to finish by summer 2015.
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