DEVELOPER Alfred McAlpine could be dropped from the project to build a new health centre in Malvern.

The centre, at the council depot off Pickersleigh Road, would replace the Court Road and Victoria Park surgeries.

Under the terms of the public private partnership agreement, the developer would pay for the building and lease it back to the PCT.

But at Wednesday's meeting of the PCT board, members agreed to put a ceiling of £482,000 per year on rental. McAlpine is projecting a figure some £30,000 above that.

The increase is due to building materials, especially steel, getting more expensive, plus the costs of decontaminating the site.

The PCT will now demand an assurance from McAlpine that it can build the health centre within this budget.

Chief executive Mike Ridley said McAlpine should be given until October 30 to reply.

"Should the response be negative, I would wish the board to support the seeking of an alternative developer," he said.

The PCT will also ask Malvern Hills District Council to do all it can to help reduce the projected costs. A McAlpine spokesman said the company and the PCT were still working together to resolve problems.

A joint statement from the surgeries said they would be working hard with all partners to conclude a deal for the site.