£7m claim after PFI deal scrapped

Developers involved in a failed £167m public/private deal to centralise health services in an Essex town are trying to claw back millions of pounds.

Essex Rivers Health Care Trust said last week that its private finance initiative (PFI) to centralise its Colchester services had been scrapped.

On Tuesday, the BBC was told that the trust's partner, private firm AMEC, is calling for £7m in compensation.

AMEC said it had incurred the costs in preparing the project.

AMEC said it was not at fault and wanted its money back.

The trust said due to issues of commercial confidentiality it was not able to comment on the compensation claim.

The BBC has been told by the Department of Health that at least part of that bill should be paid.

Changes needed

When the PFI deal was scrapped, the trust said it had already spent £3m on the scheme to centralise its services at Colchester by 2009.

Services would have been moved to Colchester General Hospital, and Essex County Hospital would have closed.

Trust chief executive Peter Murphy said the plan needed to change to make it more affordable and best fit the rapidly changing healthcare system.

The trust said it remained committed to the strategy of moving services to the general hospital, but was now working on alternative schemes.

On its website AMEC said: "On 14 June 2006, Essex Rivers NHS Trust announced the cancellation of the Colchester General Hospital PFI scheme where AMEC, in joint venture, was preferred bidder.

"The issue of reimbursement of costs of £7m, which have been capitalised in the two years since being appointed preferred bidder, has been raised with both the trust and the NHS centrally."