The new hospital will cost $13 million less than anticipated.According to the Bermuda Hospitals Board [BHB], the final bill for the design and construction costs will be $247 million.Any cost overruns will be the responsibility of Paget Health Services, which is building the new facility.The original estimate of $260 million was based on a Johns Hopkins Medicine International Report.In a statement, a hospital board spokeswoman said: “BHB has chosen to deliver the new facility through a public private partnership [PPP] that transfers many of the project’s risks, such as cost overruns and on time completion, to the private partner.“The PPP model also allows for cost certainty, and frees funds to be used by BHB now to improve patient care and facilities, because the first payment on the new building will not be made until 2014. A fair and competitive bidding process between the three bid teams shortlisted by BHB helped keep the project costs down.”BHB chairman Herman Tucker, said: “It gives me great satisfaction to see us come in under estimate. We have entered into a project we know we can afford, and our private partner has financial incentives to build, on time, a high quality hospital building. Paget Health Services will also maintain the building for the length of the contract, giving Bermuda an assurance that we will have a high quality, modern healthcare facility for the next 30 years.”He added: “As this is Bermuda’s biggest construction project, any delays and cost over-runs could be very damaging to us, especially as we face one of the most challenging economic times in living memory. A key benefit of the way we are delivering this new facility is that Paget Health Services take on the risks of delays and cost over-runs. This is very good news for us and Bermuda as we seek to control healthcare costs for the community.”Deputy Chief Executive Officer, Venetta Symonds, said: “We would like to thank the many people involved in this project, from staff to government employees, community groups, neighbours and advisors. It should give all of us great pride that we have managed to come in under budget and that work has already started. We are really looking forward to treating our first patients in the new building in 2014.”BHB is responsible for paying Paget Healthcare Services $40 million once the hospital has been built in accordance with the agreement.The rest of the costs will then be paid over the course of 30 years, through annual payments.According to the BHB statement: “The first year’s total annual payment obligation is $26.7 million. Like the capital costs of the construction phase, this annual payment amount is less than BHB had budgeted for in its capital financial planning process. All annual service payments will be disclosed via BHB’s regular financial reports.”