An NHS hospital that cost £73.5m to build privately could cost taxpayers in excess of £340m by 2034.

With health budgets across Wandsworth likely to be frozen next year campaigners expressed concern the level of repayments could jeopardise future health services.

NHS Wandsworth said it followed national guidelines when entering the 30-year private finance initiative (PFI) contract with Catalyst Healthcare to build Queen Mary’s Hospital in Roehampton in 2004.

As well as paying for building the hospital, Catalyst will foot the bill for operational and facility costs for the duration of the contract.

Catalyst spent £55m to build the hospital, which reopened in 2006 and will be returned to the NHS at the contract’s end, another £12.5m on providing equipment - including scanners, MRI machines and prosphetics equipment - and a further £6m in interest and fees.

In return NHS Wandsworth was due to pay Catalyst £9.7m (at 2003/4 Retail Price Index prices) annually for the length of the contract. However increased costs have brought that annual payment up since the contract started.

NHS Wandsworth said payments above the contracted rate last year were due to it using more service than planned and increased staff costs.

To date, figures show it has paid Catalyst £36m and - if repayments stay at 2009 levels - Catalyst will receive another £303m (£12.1m for 25 years left on the contract).

An NHS Wandsworth spokesman said PFI models were set by the Department of Health and repayments included “construction costs and operational costs like insurance, maintenance and replacement of the engineering plant and buildings, and a number of facilities management services including patient transport, cleaning, security and catering services”.

He added medical equipment would be replaced “regularly” and the building would not be allowed to deteriorate.

Of the £6m fees, he said: “Include the financing costs to set up the loans and the interest costs on these loans that were needed to build the hospital and purchase the equipment. This is similar to the costs associated with a home buyer's mortgage only on a much larger scale.”

Mike Squires, of pressure group, Keep Our NHS Public, said the fees alone could have paid for refurbishing the troubled Bolingbroke site.

He said: “Over 30 years taxpayers looks set to pay upwards of £350m for a hospital that cost £73m to rebuild. This could have bought us more new hospitals.”

Geoff Martin, of pressure group Health Emergency, said PFI agreements were a “gold-plated one-way street to profit for private companies” that future generations would pay for.

He said: “These deals are going to soak up even more of patients money at a time of budget restrictions. The real fear is these loan repayments will take priority over health priorities.”

Putney MP Justine Greening said: “People thought all their extra taxes were going towards building hospitals like Queen Mary’s, they were wrong. They have only just began to pay for it.”

Do you think PFI has helped Wandsworth NHS? Let us know at Wandsworthguardian.co.uk.

Payments already made to Catalyst

2005/2006 - £ 1,213,000

2006/2007 - £11,053,000

2007/2008 - £11,661,000

2008/2009 - £12,174,000