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December 15, 2004

NHS fines BT $9 million for late broadband

The UK Government's National Health Service is hoping to receive approximately $8.69 million in compensation from BT Group Plc as a result of the late delivery of its broadband project.

By CBR Staff Writer

In a statement, the NHS said it is negotiating with BT to pay the compensation, which includes the original GBP800,000 ($1.54 million) penalty reported in the summer of 2004 and subsequent penalties for late delivery, and also takes into account the consequent additional costs incurred by the NHS for more prolonged use of the more expensive existing NHS Net system.

In June, it emerged that BT had already missed certain performance targets to install the new national broadband network across the UK, and was also thought to have missed targets on its other two projects to develop a national patient record database and to run the new IT services across the London region.

The broadband deal signed in February is worth GBP530 million ($969.9 million) to BT over the next seven years, and once finished will enable some 18,000 NHS sites across the UK to distribute patient records electronically.

The BT contract has severe penalties for missed targets. The NHS said it has agreed a plan to get the work back on track and is fully committed to its target of having 6,000 broadband connections installed by March 31, 2005.

BT has three deals with the NHS worth a combined total of GBP2.15 billion ($3.93 billion), making the company the biggest single beneficiary of IT projects handed out by the NHS in its GBP6 billion ($11 billion) modernization program.

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