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Balfour Beatty joint venture appointed preferred bidder for the £521 million PPP Birmingham Hospital Project

Balfour Beatty, the international engineering, construction and services group, announces today that its PPP healthcare vehicle, Consort Healthcare, has been appointed preferred bidder for the £521 million Birmingham Acute and Adult Psychiatric Hospitals PPP project by the University Hospital Birmingham Trust and the Birmingham & Solihull Mental Health Trust.

The 35-year concession, which is expected to reach financial close in March 2005, is the first new general hospital in Birmingham for 70 years and is central to the reconfiguration of hospital services and the improvement of clinical facilities in the city. It will deliver a new 1,249-bedded acute inpatient facility, a 137-bed specialist psychiatric hospital and teaching facility and separate 45-bedded and 21-bedded mental health locality facilities in Sparkbrook and Stirchley.

Balfour Beatty is likely to invest some £16 million of equity in the project. Balfour Beatty Group companies will be responsible for the majority of the construction and all of the building services and physical facilities management.

Commenting on Consort’s appointment as preferred bidder, Balfour Beatty Chief Executive, Mike Welton, said: “We are delighted to be successful in bidding this very substantial and important project. When complete, the project will bring most of South Birmingham’s key medical facilities on to a single, state-of-the-art site and address the Trust’s ambitions for greater efficiency, more space and improved patient care. Balfour Beatty is bringing many decades of experience in working as a key contractor in the healthcare sector and the benefits of its expertise in planning, constructing and operating four other large PPP hospitals to the task.”

John Charlton, Chairman of University Hospital Birmingham NHS Trust, said: “We are now on the brink of one of the most exciting developments ever seen in healthcare. When we open in 2008 we will have the most up-to-date hospital facilities in Europe, if not the world.”

The concession company, Consort Healthcare (Birmingham), is a joint venture between Balfour Beatty, the Royal Bank of Scotland, HSBC and AWG. The construction work will be carried out by a joint venture between Balfour Beatty Construction Ltd, Haden Young, the building services arm of the Balfour Beatty Group, and AWG Construction Services Ltd. Facilities management for the hard services will be provided by Haden Building Management Ltd, another Balfour Beatty subsidiary, under an arrangement that could yield over £300 million of long-term service revenue.

It is anticipated that the commencement date for the first of the acute care services will be towards the end of 2008.

Consort Healthcare is the PPP concession company for three major hospitals, two of which are fully operational. These are the North Durham Hospital, which was opened in 2001, and the Edinburgh Royal Infirmary, which became fully operational in early 2003. Construction work for the new Blackburn Hospital began in July of last year. Balfour Beatty is also a partner in Health Management Group, the concession company responsible for the new University College London Hospital, and in the joint venture engaged in its construction.

ENDS

Enquires to:
Tim Sharp
Tel: 020 7216 6884
www.balfourbeatty.com

Notes for Editors

1. Balfour Beatty’s current PPP hospital concessions are:

- The 872-bed, £220 million Edinburgh Royal Infirmary which became fully operational early in 2003.

- The 454-bed, £100 million North Durham Hospital which was opened in 2001.

- The new £125 million, 308-bed Blackburn Hospital on which construction work began in July of last year and which is due to open in summer 2006.

- The new 669-bed, £220 million University College London Hospital which has been under construction since 2000 and is due to open in April 2005.

2. Balfour Beatty Construction Ltd is already at work on the East London LIFT (Local Improvement Finance Trust) scheme and is preferred bidder for further LIFT contracts likely to be worth some £150 million in total. Balfour Beatty is also one of 12 principal partners chosen by NHS Estates to work on the new Procure 21 programme for hospital building.

3. Balfour Beatty is by far the most successful engineering, construction and services group participating in the UK government’s PPP/PFI programme with some £175 million of committed equity investment and over £3 billion of construction and services work deriving from both its existing concessions and from other PFI concession companies. In addition to its four hospital concessions, it has:

- Two schools concessions, in Stoke and in Rotherham, through Transform Schools.

- Two of the three London Underground PPP concessions through Metronet in addition to the concession for the London Underground power supply.

- Four roads projects, three of which – the A1/M1 Link in Yorkshire (through Yorkshire Link), the A30/A35 in Devon and Dorset and the A50 in Derbyshire – are operational. The M77 in Scotland is under construction. The latter three projects are through Connect Roads.

- The project to upgrade and maintain Sunderland’s street lighting.

- The project to upgrade and maintain Aberdeen’s waste water facilities.

- A waste-to-energy plant in Dundee.