In 2001, Dudley Group of Hospitals NHS Trust signed a 40 year PFI contract with special purpose company, Summit Healthcare, (a consortium between Sir Robert McAlpine, as design and build contractor, Interserve, as FM contractor, and Bank of Scotland) to redevelop and expand the Russell Hall Acute Hospital in Dudley and to provide ambulatory and day care centres at two other sites. The project had a funding requirement of £150m, to be funded through equity, bonds and a loan from the European Investment Bank. The concession was worth £1bn over its 40 year life.
The project ran into difficulties during the construction phase due to additional work being required on the refurbishment of the existing buildings on the Russells Hall site. By October 2003, McAlpine had reported losses of £27m caused by delays and unforeseen work. By the time the project was completed in 2005, McAlpine had suffered losses of around £100m.
McAlpine sued the Dudley Group of Hospitals NHS Trust for damages and in May 2007 the parties settled, with McAlpine receiving £23.2m damages.