The European Investment Bank (EIB) is lending GBP 250 million for a new acute hospital and mental health facilities in South Birmingham. The project will deliver new hospitals on the existing Queen Elizabeth Hospital site for both acute and mental health services and additionally two mental healthcare facilities located in community settings.
The project will transform, modernise and expand the acute services provided by University Hospital Birmingham NHS Foundation Trust and create new, integrated modernised mental health facilities for Birmingham and Solihull Mental Health NHS Trust.
The project will take the form of a Public Private Partnership (PPP). By implementing the project as a PPP project the UK Government expects to reduce the costs of procuring and operating the hospitals over their lifetime, as a result of both increased efficiency in facilities management and the transfer of construction and design risk to the private sector.
EIB funds will be provided directly to a special purpose company, Consort Healthcare (Birmingham) Limited, owned by Balfour Beatty (40%), HSBC (30%) and Royal Bank of Scotland (30%).
The concessionaire will, through its sub-contractors, provide the building facilities, non-clinical services and maintenance required over the life of the concession. Balfour Beatty will design and construct the new hospitals and provide hard facilities management services.
The project will be financed from a combination of GBP 398.7 million senior bonds and GBP 250 million-loan facility provided by European Investment Bank (both index-linked), together with junior subordinated loan stock and ordinary shares provided by the shareholders of Consort Healthcare. Financial Guaranty Insurance Company (FGIC) will guarantee the scheduled payments of principal and interest under the Index-Linked Bonds and the EIB Loan.
EIB Vice President Peter Sedgwick commented: We are particularly pleased to co-finance the new Birmingham hospital, which will result in the vital modernisation of acute and mental healthcare facilities in south Birmingham and enhance the relationship between medical education, research and healthcare service delivery. The project will also contribute significantly to the wider plans for the urban renewal of south Birmingham.