A health board has agreed to provide a loan to a private consortium in a bid to resolve a dispute which is delaying the opening of a new children’s hospital in Edinburgh.
According to official paperwork, NHS Lothian will provide IHSL with an undisclosed sum as a way of completing the £150m project, which has been marked by threats of legal action.
The new Royal Hospital for Children and Young People was supposed to open in July 2017, but the date was pushed backed until May this year, a target that was also missed.
A new “aim” of autumn 2018 also failed to be met, with severe weather and the liquidation of a sub-contractor cited as factors. The state-of-the-art hospital remains unopened.
IHSL, which is responsible for building, financing and maintaining the hospital, is made up of a number of companies, including construction firm Brookfield Multiplex.
NHS Lothian papers from earlier this year revealed that another reason behind the delays was a disagreement between the board and the contractor on a ventilation issue.
At one point, the public body was prepared to raise a court action to “force” IHSL to design the ventilation “in accordance with their contractual obligations”.
However Jim Crombie, who is deputy chief executive of NHS Lothian downplayed the row at the time by saying there had been “significant productive engagement with IHS Lothian Ltd”, adding that “we are close to a resolution”.
According to a draft minute of a meeting of the NHS Lothian Finance committee, a report recommended a “proposed commercial agreement” between the Board and IHSL to resolve the disputed issues.
The Committee agreed to provide a “working capital loan” or “capital injection” to IHSL to fund the completion of works at the heart of the disagreement.
It was also agreed that NHS Lothian would obtain early access to the facility, which would also result in the board paying IHSL a ‘rental fee’ during this period.
The minute added: “The Committee’s agreement was conditional upon formal approval of the capital contribution from the Scottish Government.”
NHS Lothian declined to say how much the loan or capital injection is worth.
Mr Crombie said: “We are currently in commercially sensitive negotiations with our construction partners Integrated Health Solutions Ltd (IHSL). Due to the nature of these discussions, we are unable to provide further details at this time. These discussions are taking place with full support for the Scottish Government.”
Lothians MSP Miles Briggs said: “At a time when health board budgets are under real pressure, even more taxpayers’ money is being provided to the developer to allow NHS Lothian to access the facility.
“Lothian residents will be alarmed by this news and will be questioning why NHS Lothian and the developer have been unable to resolve the issues between them after such a length of time.”
A Scottish Government spokesperson said: “We were, and continue to be, fully supportive of the proposed way forward and are working closely with NHS Lothian to ensure everything possible is being done so that the new hospital opens as soon as possible.”
A spokesperson from IHSL declined to comment.
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