Interserve, as part of a consortium in which it has an equity stake, will be responsible for the re-development and partial re-construction of the Trust’s acute hospital services at the Russells Hall site. This will provide 760 beds, approximately double the current number. In addition, two new day-care centres at the existing Guest and Corbett Hospital sites will be provided.

Interserve will be responsible for facilities management for a period of 40 years with a whole life present value of £530 million. This will entail providing a broad range of non-clinical support services, both during the interim period and once the construction phase is complete. Services to be provided include estates management, portering, cleaning, catering, sterile services, laundry, security, health records, telecommunications, transport, residential accommodation, medical engineering and waste management.

Under the contract around 900 NHS staff will transfer to Interserve’s operations in two phases in May and July this year.

Commenting on the announcement, Mike Bottjer, chairman of Interserve Plc said: This award recognises the extensive expertise we have acquired for hospitals support services and the management of transfers of large public sector workforces. We are confident we possess the appropriate balance of skills to deliver tangible benefits to the Trust and to the local people who will use the hospital facilities.

Under the terms of the acquisition by Interserve Plc of Building and Property Holdings Ltd (B&P), as announced on 14 December 2000, the vendors of B&P are, following financial close of this contract, entitled to receive a deferred element of the total consideration of £74.8 million. Of this, £5.5 million will be in the form of cash to be released from escrow and the remainder will be in the form of 476,710 Interserve ordinary shares which will be issued to the former management and employee shareholders of B&P.

Application has been made to the Financial Services Authority and the London Stock Exchange plc for the 476,710 new Interserve ordinary shares to be admitted to the Official List. It is expected that admission will be granted on 21 May 2001 and that trading will commence on the same day. These shares will rank pari passu with the existing issued ordinary shares of Interserve Plc.