The Mid and South Essex Hospital Services NHS Trust (the Trust) has alleged a material number of service failure points (SFPs) in January and February 2025 and has declared but not applied deductions of approximately £2.2 million from its service payments to BY Chelmer PLC (ProjectCo)--about 8% of annual revenue. Although a large part of deductions could be passed on to the subcontractor, any amount exceeding the annual cap will be the project?s responsibility. Therefore, we see an increased risk of revenue volatility and, combined with the uncertainty around a potential further deduction, this could put additional pressure on ProjectCo's already tight financial headroom. ProjectCo is in breach of the warning notice (WN) thresholds under the Project Agreement although no
