Health chiefs say the project should not be delayed
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The Auditor General for Wales will carry out the inquiry into the tender process for a new clinical block at Guernsey's Princess Elizabeth Hospital.
The inquiry will look into why the Policy Council opted for a £27m tender - £2m higher than the lowest tender.
Guernsey's Public Accounts Committee says it will consider whether the taxpayer is getting value for money on the project.
It will also look at whether the tender process was carried out correctly.
Deputies have given the go-ahead for the PEH project, which is expected to be completed in 2009.
Health chiefs said recently the project should not be delayed and the site's redevelopment was named as the top capital priority in the States meeting on 25 October.
Once the report is ready it will be brought before the States for public discussion.