THE cost of the city’s new Sick Kids hospital has spiralled by millions of pounds – several months before work is due to begin on the project.
A budget of £13.5million had been approved for “enabling works” so land around the Royal Infirmary would be ready for construction by autumn of next year.
However, the preparations, which include new roads, car parks and flood defences, are now expected to cost nearly £17m – a quarter more than predicted.
NHS Lothian is obliged to pay Consort, the private company that owns and runs the Royal Infirmary under a controversial Private Finance Initiative (PFI) deal, to carry out the work but delays in the schedule have already also been reported.
It is believed that changes in the original plans and a decision to resurface an existing car park partially explain the increased cost of the enabling works.
NHS Lothian is hoping that in light of the higher than expected price of the preparations, the Scottish Government will step in to offer more funding, although finance chiefs have acknowledged the increase is a “matter for concern”.
Members of the health board’s finance and resources committee and trade unions have also expressed concerns over a conflict of interests as Consort has hired Balfour Beatty – which is its part-owner – to carry out the work.
It has also emerged that despite expected delays and projected costs increasing by £3.4m, Consort had twice failed to reply after being written to by NHS Lothian’s programme board, whichwill manage the hospital project.
Unison organiser David Forbes said: “We share concerns that on the face of it there is a conflict of interest, and that Consort appears to be able to ignore the programme board with impunity. How much does this show who has got the whip hand in this contract?”
The costs issue is only the latest in the long line of problems to hit the project. It had originally been planned that a new Sick Kids hospital would open this year, although the hospital is not now expected to open its doors until 2017.
NHS Lothian sources insisted that despite Consort reporting “slippage” in the programme for “most elements” of the enabling work, the anticipated completion date had not been pushed back.
Senior MSPs today called on health secretary Alex Neil to “get a grip” of the situation to ensure costs do not rise further.
Shadow health secretary and Labour Lothians MSP Neil Findlay said: “This project has been plagued by difficulties and it’s already significantly behind schedule. Now we know it’s over budget before a single brick has even been laid.” Jackson Carlaw, Conservative health spokesman, said that another major infrastructure project going over budget and being hit by repeated delays was “the last thing people in Edinburgh and the Lothians want.”
He added: “This long-awaited project is already several years overdue and it’s concerning costs are going up. The SNP-led government needs to get together with the health board to get it back on track.”
The new Sick Kids Hospital is to be built under a non-profit distributing model, which is intended to offer better value to the public sector than PFI.
A preferred bidder, which will build and partially-run the hospital before charging the NHS an annual fee for 28 years, is expected to be announced early next year.
Susan Goldsmith, NHS Lothian’s finance director, said: “Following the detailed planning process the amount of work required to improve the roads and flood defences around the RIE site, as part of this important project, has increased and the initial estimates have been revised to take account of this.
“It is disappointing that this programme of work is taking longer than initially planned.
“We are working with Consort to deliver these important elements of this project, prior to the construction of the new hospital starting on site later next year.”