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Capital Hospitals and Barts and the Royal London

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Capital Hospitals and Barts and the Royal London 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 Equipment. The 42-year concession with payment-based design, build, finance and Barts and the London NHS* Trust (which was operate (DBFO) Public Private Partnership enlarged and renamed Barts Health NHS Trust (PPP) designed to redevelop two historic in 2012) is the UK’s largest ever healthcare PPP. hospitals in central London. The construction project included two components: Construction on these busy sites was extremely complex, not least because both hospitals had • Demolishing 13 buildings at the Royal to remain fully operational at all times, and was London and creating a new 17-story completed in several phases. building, making it Europe’s largest hospital at the time.. At the Royal London, phase one covered the • Transforming the 900-year-old St demolition of the buildings and the delivery Bartholomew’s into a state-of-the-art cancer of 148,500m2 of new build in three new and cardiac center, demolishing a 1930s towers and was completed in 2011; phase two building and using the site for new build. renovated 15,600m2 and was completed in 2014. Capital Hospitals is also responsible for delivering a very wide range of services At Barts, two phases of work delivered through five further sub-contracts covering: 54,500m2 of new and 13,000m2 of renovated Hard Facilities Management, Soft Facilities space and were completed in March 2010 and Management,, Sterile Services, Managed Equipment, and Radiotherapy Managed *National Health Service Skanska ID Barts and The London Hospitals white paper 2 Capital Hospitals and Barts and the Royal London | Transforming London’s historic hospitals September 2014; a final phase of demolition, The $1.96bn project funding was made up structural work and changes is due for of $1.32bn of Index Linked Bonds issued by completion in February 2016. Deutsche Bank and Morgan Stanley, a separate $436 million Index Linked Loan from the Operation, maintenance and service provision European Investment Bank and $192 million of are on going at both hospitals, and the mezzanine and subordinated debt. concession runs to April 2048, with services having started in April 2006 on financial close. Except for an 11 day delayed handover of The entire contract was worth US$9.42bn* at Phase two at Barts, the construction has Financial Close. been delivered on-time and to budget, with the Royal London becoming one of the city’s Construction accounts for $1.94bn of this and designated hospitals for the 2012 Olympic facilities services the remainder, split between Games. In addition to working successfully Skanska Facilities Services (Hard FM*), on these intensely busy sites in the heart of Carillion (Soft FM**), Synergy (Sterile Services), one of the world’s most densely populated Siemens (Managed Equipment), and Varian cities, the Facilities Team have implemented a (Radiotherapy Managed Equipment). twenty-first century approach to building and asset management in two of the UK’s oldest Skanska has 37.5% in Capital Hospitals (an hospitals, and continue to invest in leading investment of $85 million), alongside Innisfree edge technologies in areas such as energy (50%), and Dutch Infrastructure Fund (12.5%). management. Construction was delivered by Skanska UK, with HOK as architects. Capital Hospitals, under the management of consultancy HCP, * Exchange rate based on prevailing rates, from British Pound to has responsibility for all service delivery and US Dollar, at Financial Close. lifecycle management. ** Facilities Management Skanska ID Barts and The London Hospitals white paper 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 Similarities 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 Barts United Kingdom Hospital Phase one – begin construction of new hospital St Bartholomew’s Hospital and refurbish existing building as West Smithfield catering facility for whole hospital London EC1A 7BE – 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 – completion due 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 white paper 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 at group in the UK’s National Health Service, with Barts. government revenue of £1.25bn and 14,000 • A 42-year concession to operate and staff providing healthcare to 2.5 million people maintain the hospitals, including sub- to the east of London. At the heart of the Trust contracts to deliver a broad range of are two historic hospitals, St Bartholomew’s services including clinical support services, (Barts) and the Royal London that have been such as cleaning, catering and laundry, operational for hundreds of years. Barts, near medical and radiotherapy equipment and St Paul’s in the City of London, was founded in sterile services, as well as Hard FM. 1123, making it the UK’s oldest hospital. The Royal London in the city’s culturally diverse The program is one of Skanska’s largest ever East End was founded in 1740 and has been on developments and one of the largest PPPs in its current site since 1757. It was once the home Europe. In addition to the new hospitals’ 1,248 of the so-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 and the clinical excellence, by the mid 1990s the construction project will complete in 2016. buildings themselves, some of them up to 200 years old, were out dated and in poor condition. Making sure that the hospitals’ services The UK government decided that a new continued with minimum disruption throughout hospital at the Royal London and upgraded the construction period (final completion due capabilities at Barts should be created to 2016) was critical and has delivered the following provide 21st century healthcare for local people, benefits across two new hospitals: putting patients at the heart of a transformed • Better access to care through co-located hospital experience and developing buildings clinical services that would adapt to future needs. • Improved quality of care by allowing new clinical models After many years of complex planning and • Better environment review, a Public Private Partnership project • More cases treated (1.4 million outpatient embracing both hospitals was awarded to a attendances in 2014 up from 868,000 in Skanska-led consortium in 2006 covering: 2010) • A new hospital at the Royal London, at the • Reduced costs time Europe’s largest hospital. • Improved staff recruitment and retention. Skanska ID Barts and The London Hospitals white paper 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 construction alongside live neonatal wards • 28,600m2 refurbished and completion of 5,000 rooms on a single • 30 operating theaters day. Planning, innovation and care were • 9,955 rooms 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 to demonstrates a number of Skanska’s unique create indoor environments that promote capabilities: patient healing and enhance the experience • Scale – coordinating two overlapping of both employees and visitors. The wards are healthcare construction projects several light and airy and have large windows and glass miles apart in one of the world’s busiest atria to allow natural light into the buildings. cities is a massive challenge. Few companies The buildings are fully air-conditioned and but Skanska would have the resources to incoming air is filtered to ensure that pollutants deliver it.
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