The European Investment Bank (EIB) is lending GBP 250 million for the redevelopment of The Royal London Hospital in Whitechapel and Barts Hospital in West Smithfield.
The project - the biggest hospital redevelopment in the UK - will provide Britain's biggest new hospital on the existing Royal London Hospital site and new and refurbished buildings at the Barts Hospital.
The new Royal London Hospital will include London's leading trauma and emergency care centre, one of Europe's largest renal departments and the capital's second biggest paediatric service. Barts Hospital will become a Cancer and Cardiac centre of excellence, incorporating services from The London Chest Hospital.
The project will ensure more efficient delivery of clinical services for patients in the City, east London and beyond, as well as providing long-term benefits for Barts and the London NHS Trust.
The project will take the form of a Public Private Partnership (PPP). The project's promoter is Barts and The London NHS Trust, a teaching hospital trust responsible for the delivery of specialist tertiary care and acute healthcare services to the City, east London and further afield. 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, Capital Hospitals Limited, owned by Skanska (37.5%), Innisfree (37.5%) and Equion (25%). The concessionaire will, through its sub-contractors, provide the building facilities, non-clinical services and maintenance required over the life of the concession. Skanska will design and construct the new hospitals and provide hard facilities management services. Sovereign Hospital Services will provide soft facilities management services.
The project will be financed from a combination of GBP 1,020 million senior bonds and GBP 250 million-loan facility provided by European Investment Bank (both index-linked), together with mezzanine loan, junior subordinated loan stock and ordinary shares provided by the shareholders of Capital Hospitals. FSA and Ambac 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 biggest and most complex hospital redevelopment in the UK, which will result in the vital modernisation of specialist tertiary care and acute healthcare facilities in the City and east London. Under EU policy the Bank is committed to ensuring access to the best health services and to keeping medical research at the forefront.