CONSTRUCTION of a new main building at Queen Mary's Hospital in Roehampton has come a step closer with the signing of the contract.

A £55m 139-bed community hospital will be built over the next 18 months at the northern end of the site in Roehampton Lane, just outside the borough.

Preliminary construction work began some months ago, but the Private Finance Initiative deal has now been formally signed between Wandsworth Primary Care Trust and Catalyst Healthcare.

The new hospital will open to patients in 2006.

The 24,000 square metre three to four storey hospital building is being built on the northern perimeter of the current site.

Its compact design means the existing hospital can remain open throughout construction with all patient services running as usual.

The hospital will contain 50 elderly and intermediate care beds, 20 rehabilitation beds, limb fitting and specialist rehabilitation services, a day hospital for older people, a minor injuries treatment centre, outpatient rapid diagnostic and treatment facilities, 69 mental health care beds and mental health community and day hospital facilities.

The Catalyst consortium includes Bovis Lend Lease, which is designing and building the unit, Lend Lease Facilities Management which will maintain the building, and Sodexho, which will provide catering, portering, cleaning, security and estate management. Wandsworth PCT and South West London & St George's Mental Health Trust will deliver all the clinical services.

The new hospital will occupy just over a third of the total Queen Mary's site. When it opens, the remainder will be vacated and redeveloped as 286 new homes.

The site includes Roehampton House, a Grade 1 listed building, built in 1710 and enlarged by Lutyens 200 years later.

It was converted into a hospital in 1915, serving men wounded in the First World War and specialising in making and fitting artificial limbs.