Contractors get £11.6m ‘bonus for failure’ at Edinburgh’s new Sick Kids hospital

HEALTH chiefs are to hand £11.6 million of taxpayers’ money to contractors on the troubled new Sick Kids hospital to avoid a costly court case over who is responsible for a catalogue of problems with the project.

But today one MSP branded the payment a “bonus for failure”.

The £150m new building, next to the Royal Infirmary at Little France, was originally due to open in winter 2012.

But it has been repeatedly delayed by a series of issues, including a protracted land swap deal, partner firms running into financial difficulties, poor winter weather and a serious flood after a hot water pipe burst overnight.

The new Sick Kids hospital has been fraught with problems

Then in November, when the building was expected to be handed over to the NHS, an independent assessor refused to sign it off because it failed to meet all the specifications.

Scottish Government officials, updating MSPs on progress this week, admitted there was still no date for the new hospital to open.

And they told Edinburgh Southern Labour MSP Daniel Johnson negotiations were still going on over the proposed £11.6m settlement between NHS Lothian and contractors IHSL.

In a letter to Mr Johnson, NHS Lothian said the Scottish Government was providing the cash which was intended to be “in full and final settlement of the agreement, resolving all disputes and securing a completed facility within an agreed timetable”.

The letter added that a settlement agreement would offer better value for money than the alternative of pursuing court action.

It said the disputes with the contractors involved differing interpretations of specifications in areas including drainage, fire protection and ventilation, as well as numerous more minor issues.

The letter said the full amount of the payment would not be paid to IHSL until the building was completed.

Mr Johnson said the saga raised serious questions.

“The payment of additional money to a private sector company for what is meant to be a fixed-price contract raises questions about the value for money of this project.

“After all the delays and the lack of clarity about a completion date, this will look to many people like a bonus for failure.”

And he said questions needed to be asked about how the project had been handled,

He said: “The new Sick Kids hospital is now years late, so it is simply unbelievable that we still don’t even have a completion date.

“This is now a project dogged by failure and people in Edinburgh have been let down by continued delays.”

Jim Crombie, deputy chief executive of NHS Lothian, said: “We have made significant progress in agreeing a work plan for completion of outstanding works on the new Royal Hospital for Children and Young People and Department of Clinical Neuroscience. We expect to be able to confirm the timeline very soon.

“Our priority has always been to ensure the building meets our detailed requirements, and our commitment to patients, their families and our staff is that this facility is being built to meet the very highest of standards.”