Carillion Plc Regulatory News (CLLN)

3 August 2011

Carillion joint venture achieves financial close on £1.7 billion Public Private Partnership hospital in Canada

A Carillion joint venture, Hospital Infrastructure Partners, has achieved financial close on the contract to provide the new replacement Oakville Hospital in Ontario. This follows the announcement on 8 June 2011 that Infrastructure Ontario and Halton Healthcare Services had selected Hospital Infrastructure Partners as the preferred bidder to finance, design, build and provide facilities management and life-cycle maintenance services for the new hospital

The project will be delivered using the Alternative Financing and Procurement (AFP) model, which is similar to the UK's Public Private Partnership model. The 30-year contract is expected to be worth some £1.3 billion at 2011 prices and £1.7 billion after taking into account indexation for anticipated price inflation over the contract period.

This is Carillion's sixth Public Private Partnership hospital in Canada, reinforcing our position as a market leader in PPP projects in Canada, particularly in the health sector. Carillion will invest some £28 million of equity in the project, giving Carillion a 40 per cent equity share in the Joint Venture. As a result, Carillion's share of the Joint Venture's revenue is expected to be approximately £500 million over the life of the contract, at 2011 prices. In addition, Carillion will also be a member of the Joint Venture that will carry out the construction work and provide facilities management and life-cycle maintenance services over the 30-year concession period, which together are expected to generate some £390 million of revenue for Carillion at 2011 prices.

Construction, which will begin this Summer and be completed by Summer 2015, is expected to create significant employment opportunities for the local community and also stimulate economic development in the region.

The new hospital will be a state-of-the-art facility providing a full range of health services. It has been designed to meet the Canada Green Building Council's Leadership in Energy and Environmental Design (LEED®) rating system, with the goal of achieving LEED® Silver certification. LEED® buildings focus on healthy indoor environments, reduced greenhouse gas emissions and efficient use of energy, water and other resources.

Commenting, Carillion Chief Executive, John McDonough, said: "We are delighted to have achieved financial close on this important new hospital project in less than two months since our appointment as preferred bidder. Securing this contract further reinforces Carillion's position as a leader in the PPP market, particularly in the health sector. We look forward to working with Infrastructure Ontario and Halton Healthcare Services to deliver this state of the art hospital, for which we will also provide facilities management and life-cycle maintenance services."

For further information contact:

John Denning, Director Group Corporate Affairs +44 (0) 1902 316426

Finsbury

James Murgatroyd or Gordon Simpson +44 (0) 207 2513801

Notes to editors

Carillion is a leading support services company with a substantial portfolio of Public Private Partnership projects and extensive construction capabilities. The Group had annual revenue in 2010 of £5.1 billion, employs around 50,000 people and operates across the UK, in the Middle East and Canada. 

The Group has four business segments.

Support services - this includes facilities management, facilities services, energy services, utility services, road maintenance, rail services and consultancy services.

Public Private Partnership (PPP) projects - this includes our investing activities in PPP projects in our chosen sectors of Defence, Health, Education, Transport, Secure and other Government accommodation.

Middle East construction services - this includes our building and civil engineering activities in the Middle East.

Construction services (excluding the Middle East) - this includes our building, civil engineering and developments activities in the UK and our construction activities in Canada.

This and other Carillion news releases can be found at www.carillionplc.com