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Laing O’Rourke agrees deal for completion of loss-making ‘super hospital’

2 Jan 18 Laing O’Rourke has finalised a deal for completion of a major Montreal hospital that has brought it significant financial losses.

Canadian contractor Pomerleau will replace the Construction Sant茅 Montr茅al (CSM) consortium that includes Laing O鈥橰ourke on the CA$400m remaining stage of the project. Stage 1 of the 鈥榮uper hospital鈥 was handed over by CSM during 2017. The aim in handing over the construction is to minimise further risk.

Laing O鈥橰ourke group chief executive Ray O鈥橰ourke said in a statement on 22 December: 鈥淚 am pleased to confirm that, as part of Construction Sant茅 Montr茅al - the delivery JV made up of Laing O鈥橰ourke and Obrascon Huarte Lain (OHL) - we have finalised a deal whereby Quebec-based Tier One contractor, Pomerleau, engages as principal contractor to deliver Phase 2 of the CHUM (Centre hospitalier de l鈥橴niversit茅 de Montr茅al) project in Montreal, Canada.鈥

He added: 鈥淲e have regularly reported that the project has resulted in significant financial losses for the Laing O鈥橰ourke Group, and minimising further risk on Phase 2 has been a priority.鈥

Pomerleau is the principal contractor tasked with delivering the second phase of CHUM and has already been working with the Laing O鈥橰ourke team on dismantling the old St-Luc Hospital site on which Phase 2 sits. The demolition work is scheduled to take approximately one year.聽

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The second phase consists of outpatient services, clinical and administrative offices, as well as an amphitheatre and parking lots. 鈥淲e will be maintaining a Laing O鈥橰ourke team in Montreal, as part of CSM, ensuring that Phase 1 continues to run smoothly through the handover period and monitoring Pomerleau鈥檚 progress on the Phase 2 programme through to completion of the contract,鈥 said O鈥橰ourke.

鈥淥ur teams have worked tirelessly to deliver on the commitment to construct one of the world鈥檚 largest and most complex medical precincts, handing over Phase 1 of the CHUM earlier this year [2017],鈥 he said. Full patient transfer was successfully completed in October 2017.

鈥淲e enter this next stage with that same commitment and diligence across our teams in providing the city of Montreal with a truly remarkable healthcare project,鈥 he said. 鈥淪uccessful execution of this transaction will now allow us to finalise our FY17 year-end accounts (31st March 2017), which we expect to file at Companies House at the end of January 2018.鈥

O鈥橰ourke said that he could confirm that the FY17 Group results show a profit before JVs and exceptionals, and that he could further confirm that FY18 year-to-date results show a further improvement in the profitability of the core UK business.

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