Laing JV to claim costs as Leicester PFI shelved

Angry joint venture bidders are looking to recover millions in costs from Leicester health chiefs who pulled the plug on a £711m PFI hospital project last week.

Leaders of the University Hospitals of Leicester (UHL) NHS Trust decided to dump the Pathway Project after the Triskelion Healthcare joint venture bust the budget by £210m.

Triskelion - a joint venture between John Laing, Laing O'Rourke and Serco - was originally appointed preferred bidder in December 2004.

The jv finally agreed a £711m price with the trust last summer but recently revised its budget estimate upward to £921m with no guarantee the cost would not rise further.

Trust leaders launched an urgent review of the Pathway Project scheme in consultation with the Department of Health in April before deciding to shelve it following nine weeks of debate.

A source close to Triskelion said: "We will be looking to recover our costs, which are substantial, but it is too early to say whether we will be going down the legal route straight away.

"We have invested a substantial amount in terms of time and costs in this project we are talking millions."

UHL chief executive Dr Peter Reading said: "The cost increase after the agreement reached last summer brought the scheme to a crunch point.

"Originally, £711m had been set as the level at which Pathway was best value for taxpayers' money. Another £210m required to deliver the specified scheme meant this was no longer the case."

The five-year construction programme was due to be the largest PFI hospital development outside London and involved work on the Glenfield, Leicester General and Leicester Royal Infirmary sites.

Triskelion Healthcare chairman Richard Weston said: "Last summer the scheme was rescoped to make greater use of the existing buildings. Despite the best efforts of all participants, we have not been able to accommodate all respective needs in the economic parameters set out in the memorandum of agreement in summer 2006."

UHL has launched a six-month review to assess future hospital investment plans.