2.16 Between Carillion's collapse in January 2018 and July 2018, it seemed likely that Royal Liverpool could be completed during 2018 under the existing PFI arrangements. The PFI company looked for a construction contractor to replace Carillion. In March 2018, following discussions with three potential firms, the PFI company terminated Carillion's contract and appointed Laing O'Rourke as construction contractor. Laing O'Rourke's subsidiary Crown House Technologies had been providing mechanical, electrical and plumbing services to the hospital project before Carillion's collapse.
2.17 The extent of the costs associated with the structural problems began to emerge over the months up to July 2018. In April, the PFI company commissioned Arup to assess the extent of the structural problems. Early indications from Arup to the PFI company suggested that the problems with the beams were significantly more extensive than expected (paragraph 1.17). In July the lenders told the Trust that the estimate for completing the hospital had increased from £55 million to £107 million, and they were not yet sure of the full extent of the problems. At this point, the Trust believed the hospital could be completed by September 2019 but would probably be further delayed.
2.18 Between March and September 2018, the lenders proposed several rescue packages for the Royal Liverpool hospital. These included additional funding from the lenders in return for various changes to the payment and compensation terms. In September the lenders proposed a package in which they would complete the hospital in exchange for a cap on costs and liabilities and the removal of responsibility for maintaining the building once it was built. The Trust, the Department of Health & Social Care and HM Treasury rejected all these proposals because they transferred risk back to the public sector.
2.19 In early September 2018, following the experience of Midland Metropolitan, the lenders and the central government recovery group concluded that given the growing number of problems with the hospital it was very unlikely that the current PFI scheme would be commercially viable or that another could be set up. They agreed to terminate the PFI agreement as smoothly and rapidly as possible.