Funding and Procurement

It was announced as part of the Scottish Government’s budget for 2011/12 that the re-provision of Royal Hospital for Sick Children and Department of Clinical Neurosciences would be delivered using the Non-Profit Distributing (NPD) Model, with support from the Scottish Futures Trust.

Since then the project team has been working closely with the Scottish Government and Scottish Futures Trust to progress the project.

What is NPD?

The NPD model of private financing was developed as an alternative to the traditional private finance model. It has been designed to:

  • Enhance stakeholder involvement in the management of projects
  • Cap the profits for the private sector
  • Ensure value for money

What does this mean?

The project went through a thorough procurement process to select a private sector partner who will design, build, maintain and finance the new facility.

Once the building is complete, NHS Lothian will pay an annual charge to the private sector partner. At the end of the agreed lease period ownership of the building will transfer to NHS Lothian

More information on the NPD funding model can be found on the Scottish Futures Trust website.

How did NHS Lothian select a private sector partner?

NHS Lothian advertised the project on the Public Contracts Scotland ​website and, in line with European procurement legislation, in the Official Journal of the European Union. The Information Memorandum​from the advert provides more detail on the project and the pre-qualification process​.

Parties interested in bidding for the project were invited to complete a pre-qualification questionnaire. From the questionnaire responses, three organisations were selected to move onto the next phase of competitive dialogue. These were:

The preferred bidder Integrated Health Solutions Lothian were appointed in March 2014.

They will finalise the design for the new building, with work starting on site in the autumn of 2014. The hospital is expected to become operational in the summer of 2017.


Junior Debt Provider

Construction Contractor

FM Contractor

Lead Architect

Mechanical and Electrical Engineers

Civil and Structural Engineers


Royal BAM Group NV

Stichting Depository PGGM Infrastructure

Balfour Beatty Group

BAM Construction

Balfour Beatty Construction


Balfour Beatty Workplace

Building Design Partnership

Hulley and Kirkwood Consulting Engineers

Ove Arup and Partners

Integrated Health Solutions Lothian

Macquarie Capital Group

Brookfield Multiplex Construction Europe

Bouyges E+S FM UK Ltd


Wallace Whittle

Robert Baird Group


Laing O’Rourke Plc

Johns Laing Plc

Lain O’Rourke Construction


Keppie Design

Hasssell Limited


 WSP Group

Will everything be funded through NPD?

Work required to prepare the site for the new building, such as the diversion of sewer pipes and the provision of flood defences, will be funded through capital investment.

Changes within the Royal Infirmary of Edinburgh, such as adaptations required for the pharmacy to serve the Royal Hospital for Sick Children and Department of Clinical Neurosciences as well as the RIE, will be capital-funded.

Medical equipment and furniture for the new hospital will be procured as part of normal NHS processes, and will not be a part of the NPD contract.

Last Reviewed: 29/04/2014