Joint bid wins Viljandi Hospital construction tender

Construction work.
Construction work. Source: Olev Kenk/ERR

The public tender organized for the continuation of construction work on Viljandi Hospital has been won by a joint bid from Rand and Tuulberg alongside Ehitustrust.

While the new contract for the Viljandi Hospital project is still yet to be signed, the work is expected to be completed in 29 months.

The previous main contractor, Fund Ehitus OÜ ultimately withdrew from the hospital's construction, as a result of the work taking place against the backdrop of at least two major crises. Both the coronavirus pandemic and Russia's war in Ukraine contributed significantly to increases in the cost of building materials and electricity, while also exacerbating supply problems and worker shortages.

It is perhaps unsurprising therefore, that once Fund Ehitus pulled out, only three companies expressed interest in taking over the tender for the hospital project.

Mihkel Mäger, director of Estonian state real estate management company Riigi Kinnisvara AS (RKAS), said, that work on the completion of Viljandi Hospital would continue under a consortium of construction firms Ehitustrust AS and Rand and Tuulberg.

"A total of three bids were received for the tender. Yes, perhaps we were expecting a few more, but all three who did put in bids are good Estonian construction companies. We conducted the tender using a value-based system, which means that in addition to the price of the bids, we also evaluated the project teams, which then meant the bidders received additional 'value points,'" said Mäger.

Mäger added, that the winning bid fell within the expected price range for the project. One of the factors contributing to this was the willingness of the contracting authority share the risks involved should there be further significant changes to the construction price index.

"If, for some reason, the price of construction should continue to rise in the near future, this will be reflected in the construction price index, and so, we will be able to adjust the contract price accordingly. The total length of the contract to be awarded for the completion of the work will be 29 months," said Mäger..

Mäger also said, that the total cost of the previous construction contract had been €39 million excluding VAT, while the current tender is €52 million, plus VAT.

As the contract is still yet to be signed, Mäger said it was too soon to say when work on the hospital would get underway. "However, that I believe it will be in the near future, as all the details fall into place," he said,

Mäger preferred not to say whether relations with Viljandi Hospital's previous contractor have now been fully concluded.


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Editor: Michael Cole

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