New Building on the KEMH Site December 2010

BHB has signed a project agreement with Paget Health Services to design, build, finance and maintain a new building on the King Edward VII Memorial Hospital site. Paget Health Services (PHS) is a consortium of local and international firms with knowledge and experience appropriate for this project. PHS will now have access to the new hospital building site in order to begin construction.

Here’s how the BHB-PHS partnership works: PHS pays for the construction of the new hospital building, and BHB pays nothing until it is complete in three years’ time to BHB’s specifications. This means BHB has had time to plan in advance for the payments to PHS that will begin in 2014 when the building is complete.

In 2014, BHB makes a lump sum payment. After that, rather like a mortgage, BHB makes annual repayments to PHS for the duration of the concession (30 years).

Unlike a usual mortgage, however:

• the annual repayments cover the capital cost of the project, including design, construction, construction management, and financing the construction as well as building and lifecycle maintenance

• BHB retains ownership of the land and new building

• the new building must be maintained in accordance with BHB’s specifications for 30 years

Repayments are subject to deductions by BHB if the new building is not performing to BHB’s pre-determined specifications and standards. This transfer of performance risk is one of the key benefits of a Public Private Partnership.

WHO WILL BE HIRING CONSTRUCTION WORKERS FOR THE NEW HOSPITAL BUILDING?

The trade contractors to be appointed by BCM McAlpine will hire workers for the new building.

BHB will continue with renovation projects, like those listed to the left, at the existing KEMH building and nurses’ residence using BHB’s usual procurement process via tender.