Capital Hospitals and Barts and the Royal London
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Capital Hospitals and Barts and the Royal London Transforming London’s historic hospitals Capital Hospitals and Barts and the Royal London | Transforming London’s historic hospitals Overview Capital Hospitals is a Skanska-led availability Sterile Services, Managed Equipment, and payment-based design, build, finance and Radiotherapy Managed Equipment. The 42- operate (DBFO) Public Private Partnership year concession with Barts and the London (PPP) designed to redevelop two historic NHS* Trust (which was enlarged and renamed hospitals in central London. The construction Barts Health NHS Trust in 2012) is the UK’s project included two components: largest ever healthcare PPP. • Demolishing 13 buildings at the Royal Construction on these busy sites was extremely London Hospital and creating a new complex, not least because both hospitals had 17-story building, making it Europe’s largest to remain fully operational at all times, and was hospital at the time completed in several phases. • Transforming the 900-year-old St Bartholomew’s Hospital (Barts) into At the Royal London, Phase one covered the a state-of-the-art cancer and cardiac center, demolition of the buildings and the delivery demolishing a 1930s building and using the of 148,500m2 of new build in three new site for new build towers and was completed in 2011; Phase two renovated 15,600m2 and was completed Capital Hospitals is also responsible for in 2014. delivering a very wide range of services through five further sub-contracts covering: At Barts, two phases of work delivered Hard Facilities Management (Hard FM), 54,500m2 of new and 13,000m2 of renovated Soft Facilities Management (Soft FM), *National Health Service Skanska ID Barts and The London Hospitals case study 2 Capital Hospitals and Barts and the Royal London | Transforming London’s historic hospitals space and were completed in March 2010 and The $1.96bn project funding was made up September 2014; a final phase of demolition, of $1.32bn of Index Linked Bonds issued by structural work and changes was completed Deutsche Bank and Morgan Stanley, a separate in March 2016. $436 million Index Linked Loan from the European Investment Bank and $192 million of Operation, maintenance and service provision mezzanine and subordinated debt. are on going at both hospitals, and the concession runs to April 2048, with services Except for an 11 day delayed handover of having started in April 2006 on financial close. Phase two at Barts, the construction has The entire contract was worth US$9.42bn* at been delivered on-time and to budget, with Financial Close. the Royal London becoming one of the city’s designated hospitals for the 2012 Olympic Construction accounts for $1.94bn of this Games. In addition to working successfully on and facilities services the remainder, split these intensely busy sites in the heart of one of between Skanska Facilities Services (Hard FM), the world’s most densely populated cities, the Carillion (Soft FM), Synergy (Sterile Services), Facilities Team has implemented a 21st century Siemens (Managed Equipment), and Varian approach to building and asset management in (Radiotherapy Managed Equipment). two of the UK’s oldest hospitals, and continues to invest in leading edge technologies in areas Skanska has 37.5% in Capital Hospitals (an such as energy management. investment of $85 million), alongside Innisfree (50%), and Dutch Infrastructure Fund (12.5%). Construction was delivered by Skanska UK, with HOK as architects. Capital Hospitals, under the management of consultancy HCP, has responsibility for all service delivery and * Exchange rate based on prevailing rates, from British Pound to lifecycle management. US Dollar, at Financial Close. Skanska ID Barts and The London Hospitals case study 3 Capital Hospitals and Barts and the Royal London | Transforming London’s historic hospitals Skanska (37.5%) Shareholding Capital Hospitals Consortium Innisfree (50%) DIF (12.5%) Health Sector Equity Investment/Financing Size at time of Hospitals FC: $225m / $1.96bn ID’s Equity Investment at time of FC (and Project Details percentage): $85m (37.5%) Complex Design-Build contract O&M Value at time of FC: $7.48bn DBFO PPP in the UK Large financing size Design and construction of the Large participation by developer/contractor Royal London Hospital Phase one – demolition of existing buildings Reference and delivery of 148,500m2 in three Barts Health NHS Trust new towers – completed 2011 The Royal London Hospital Phase two – refurbishment of 15,600m2 Whitechapel Road – completed 2014 Whitechapel London E1 1BB Design and construction of United Kingdom Barts Hospital Phase one – begin construction of new St Bartholomew’s Hospital hospital and refurbish existing West Smithfield building as catering facility for London EC1A 7BE whole hospital – completed 2010 United Kingdom Phase two – complete construction by joining new and ancient buildings under The project in brief a single roof (a total of 54,500m2 Concession: 2006-2048 new and 13,000m2 refurbished Construction: 2006-2016 space) – completed 2014 Construction: Skanska 100% Phase three – final demolition, structural work, Construction value to Skanska: $1.94bn new car park and changes to Skanska investment: $85 million Phase one – completed 2016 Shareholding: Capital Hospitals Consortium – Skanska (37.5%), Innisfree (50%), DIF (12.5%) Management by HCP of Capital Hospitals and its six contracts: Payment Mechanism: Availability Construction – Skanska, plus architect HOK Date of Financial Close: April 27, 2006 Hard FM – Skanska Facilities Services Construction Start Date: April 27, 2006 Soft FM – Carillion Concession Period Length: 42 years Sterile Services – Synergy Concession Period Year End: 2048 Managed Equipment – Siemens Project Value at time of Financial Close (FC) Radiotherapy Managed Equipment – Varian $9.42bn Skanska ID Barts and The London Hospitals case study 4 Capital Hospitals and Barts and the Royal London | Transforming London’s historic hospitals The challenge Barts Health NHS Trust is the largest hospital • A cancer and cardiac center of excellence group in the UK’s National Health Service, at Barts with government revenue of £1.25bn and • A 42-year concession to operate and 14,000 staff providing healthcare to 2.5 million maintain the hospitals, including sub- people to the east of London. At the heart of the contracts to deliver a broad range of Trust are two historic hospitals, Barts and the services including clinical support services, Royal London that have been operational for such as cleaning, catering and laundry, hundreds of years. Barts, near St Paul’s in the medical and radiotherapy equipment and City of London, was founded in 1123, making sterile services, as well as Hard FM it the UK’s oldest hospital. The Royal London in the city’s culturally diverse East End was The program is one of Skanska’s largest ever founded in 1740 and has been on its current developments and one of the largest PPPs in site since 1757. It was once the home of the so- Europe. In addition to the new hospitals’ 1,248 called ‘elephant man’. patient beds, Barts will have eight operating theaters and the Royal London 22. Both Although the Trust has a long tradition of hospitals are now fully operational. clinical excellence, by the mid 1990s the buildings themselves, some of them up to 200 Making sure that the hospitals’ services years old, were outdated and in poor condition. continued with minimum disruption throughout The UK government decided that a new the construction period (final completion due hospital at the Royal London and upgraded 2016) was critical and has delivered the following capabilities at Barts should be created to benefits across two new hospitals: provide 21st century healthcare for local people, • Better access to care through co-located putting patients at the heart of a transformed clinical services hospital experience and developing buildings • Improved quality of care by allowing new that would adapt to future needs. clinical models • Better environment After many years of complex planning and • More cases treated (1.4 million outpatient review, a PPP project embracing both hospitals attendances in 2014 up from 868,000 was awarded to a Skanska-led consortium in in 2010) 2006 covering: • Reduced costs • A new hospital at the Royal London, at the • Improved staff recruitment and retention time Europe’s largest hospital Skanska ID Barts and The London Hospitals case study 5 Capital Hospitals and Barts and the Royal London | Transforming London’s historic hospitals Two separate construction programs, each with unique challenges Overall • 203,000m2 new build required construction alongside live • 28,600m2 refurbished neonatal wards and completion of 5,000 • 30 operating theaters rooms on a single day. Planning, innovation • 9,955 rooms and care were critical • 1,248 patient beds • Partnership – these two major sites affect • 1,070 showers many stakeholder groups, both within and • 2,000 WCs beyond the hospital. Our team has made consistent progress by creating strong The project has covered the challenges facing partnerships that embrace all the groups a unique mix of new and old buildings, from affected by the projects, from staff and dealing with Roman remains in the basement patients to the local community to integrating state-of-the-art structures with 18th century landmarks. It consistently The redeveloped hospitals are designed demonstrates a number of Skanska’s unique to create indoor environments that promote capabilities: patient healing and enhance the experience • Scale – coordinating two overlapping of both employees and visitors. The wards healthcare construction projects several are light and airy and have large windows miles apart in one of the world’s busiest and glass atria to allow natural light into cities is a massive challenge. Few companies the buildings. The buildings are fully air- but Skanska would have the resources conditioned and incoming air is filtered to deliver it to ensure that pollutants from the surrounding • Working on tight city sites – both hospitals city do not compromise the sterile hospital were constructed alongside existing, environments.