Private sector investors and shareholders have lost at least £279 million on the construction of a West Midlands hospital following the collapse of Carillion two years ago.
A new report published by the National Audit Office (NAO) today also says the cost to the taxpayer of finishing the Midland Metropolitan Hospital has increased by three per cent as the project's budget has spiralled by more than £300 million.
It follows the demise of the construction and infrastructure giant which fell into liquidation in January 2018.
The NAO's report says shareholders, investors, insurers and Carillion are at least £603 million out of pocket for the construction of the Midlands Metropolitan in Smethwick and the Royal Liverpool University Hospital, both of which were funded through the private finance initiative (PFI) scheme.
The NAO said the Government wanted to ensure the private sector honoured its contracts and it rejected proposals for more public funding to bail out the two developments or reduce the risk that lenders were exposed to.
Carillion, which was headquartered in Wolverhampton, was leading the development of the 669-bed Midland Metropolitan which will replace many of the services currently provided by Sandwell and City hospitals.
But the company suffered a catastrophic collapse as it buckled under the weight of mounting debts worth £900 million and a pension deficit of £587 million, leaving projects across the country hanging in the balance.
The Midland Metropolitan is due to cost at least £988 million to build and run - just over £300 million more than the original £686 million budget, according to the NAO.
The taxpayer is currently expected to pay £709 million of this, an increase of three per cent from what was originally planned.
The hospital is now due to be finished in July 2022 against an original completion date of October 2018 but both this and the Royal Liverpool suffered delays even before Carillion collapsed.
Sandwell and West Birmingham Hospitals NHS Trust, the Government and private investors attempted to rescue the project but, by September 2018, these attempts had failed.
This prompted the Government to terminate both PFI schemes and provide public financing to complete the hospitals while new suppliers were chosen without competition.
Sandwell and West Birmingham Hospitals NHS Trust ran a public procurement for the contract to complete the Midland Metropolitan, which took 15 months and attracted just one bidder, namely Balfour Beatty.
The NAO said there were "significant risks" of further delays and added costs at both hospitals and the two trusts were now directly managing the contracts with construction firms.
Toby Lewis, chief executive of Sandwell and West Birmingham Hospitals NHS Trust, said today: "The report makes very clear the significant differences between the two schemes and outlines the risk management arrangements that the trust has in place with Balfour Beatty.
"The detail of the report makes clear the due procurement processes followed by the trust, both at the outset of the project and following Carillion's liquidation.
"It also explains our success in obtaining warranties for prior work done by our subcontractors, many of whom continue to work on the project, ensuring local jobs and continuity of expertise.
"The need for a second contract has not led to an enormous increase in expenditure when compared to the lifetime cost approved in 2014.
"If we account for the long-term cost of money over a 30-year term, we expect the cost of the project will be around £70 million above expectations then and the report narrates how that cost is split between public sector funding and private sector losses.
"We remain clear that Midland Metropolitan remains value for money."
