Consortium to get £40m for £15m lab

Health Minister Edwin Poots revealed that two Public Finance Initiatives (PFI) in the Western Trust last until 2032 and 2042 respectively, the longest of any such contracts in the province. He made the revelation in response to a query from East Londonderry MLA David McClarty.

The Altnagelvin deal is the second longest tying a local health trust with a private financier or operator lasting until 2032.

The longest public/private partnership - involving the Northern Ireland Health Group - is for a new acute hospital in Enniskillen and lasts until May 2042.

Mr Poots advised the Altnagelvin contract is held by the United Health Care Land Company Ltd.

According to Health Minister Edwin Poots: “The contract is for 25 years for the design, build, operation and maintenance of a Laboratory and Pharmacy Centre at Altnagelvin.

“This facility includes provision of five specialist laboratory areas, along with a new pharmacy department which incorporates special cancer drug dispensing facilities.”

Although the project cost £15.2m the consortium will net £40m in total over 25 years - a profit of £24.8m minus maintenance costs for which it is responsible.

Back in 2007 United Healthcare UK - a subsidiary of the largest US health insurer - announced it was joining forces with the Land Group, a specialist firm of property investors, developers, and financiers to form The United Healthcare Land Company Ltd as promoter of the Altnagelvin project.

United Healthcare said it was a specialist private finance initiative (PFI) developer of health facilities for the NHS and that their expertise has been developed over a period of 12 years with projects ranging in size from £1m to £150m.

Under the terms of the 25 year contract which expires in 2032 the consortium is set to pocket £40m in public funds.

The Public Accounts Committee (PAC) were advised that the company would get £1.6m per year from the Western Trust until 2032.

“The construction of the Centre, which cost £15.2 million, was funded through a public/private partnership (PFI). This will be repaid by the Trust over the 25 year term of the partnership Agreement through annual payments of £1.6 million; these payments will also cover the operation and maintenance of the building over the term of the Agreement. A further £3.1 million was also invested by the public sector in providing a range of specialised equipment for the Centre,” a sitting of the PAC was told in 2007.