A NEW report from the audit office has alleged that the South West Acute Hospital will cost the public purse a colossal £712m, £488m more than the initial project cost.
The figures released last week reveal that the Enniskillen hospital, Northern Ireland’s first Private Finance Initiative (PFI) hospital will cost more than three times more (£224m) due to payments made over a 30 year period.
The extra money will go towards payments to the private sector for their funding of the hospital.
In the same figures a Western Trust services centre with an initial project cost of £15m will cost the public purse £56m.
The South West Acute Hospital opened its doors in 2012 under a 30 year Private Finance Initiative
The Northern Ireland Health Group is the private partner in the initiative. Another private company, Interserve provides estates maintenance and management services, energy management, grounds maintenance and window cleaning.
There are currently 39 PFI projects in Northern Ireland and the report states that the current annual cost of PFI contracts in payments to the private sector is £253m.
A staggering £7.3 billion is the apparent total amount that will be paid to the private sector over the full life of the individual contracts for construction, operations, lifecycle and maintenance costs, on a whole life basis
In response to the figures released by the audit office a Western Health and Social Care Trust (Western Trust) spokesman said:
“The aim of a Private Finance Initiative (PFI) is to allow the public sector to undertake major capital investments in the absence of available capital funding.
“It also allows public organisations to make effective use of private sector skills, experience and finance to deliver infrastructure investments.
“This method provides a way of funding major capital investments without the immediate need to use public fund.
“The private finance initiative (PFI) that facilitated the South West Acute Hospital development and the Services Centre at Altnagelvin Hospital ensured that both projects were delivered on time and within the costs agreed with the respective private finance companies involved.
“In any public project of this scale there is a significant number of approval processes to go through. In terms of PFI projects one of the most fundamental stages involves a clear demonstration of proving value for money for the public purse.
“This has been the case both within the Trust’s own arrangements but also in order to receive approval from the Department of Health as well as the Department of Finance and Personnel.”
Local UUP councillor and mental health practitioner Raymond Farrell stated there were mixed views and opinions on the role of PFI in building and improving infratructure.
“Such an arrangement locks the taxpayer into long term debt and that is something I have a difficulty with.
“There may be merit in this arrangement when money can be retrieved from various services that the public can pay for such as telecommunication improvements, but I do have a difficulty myself in the building of hospitals, especially when hundreds of millions of pounds are returned from the NHS to the treasury at the end of the financial year in money that has not been spent.”
To read more.. Subscribe to current edition