The new Dunedin Hospital faces a potential cost escalation to $3 billion, requiring either a reduction in its scope or a phased construction approach on the old hospital site to remain within its adjusted budget of $1.88 billion.
Infrastructure Minister Chris Bishop said that on top of the previous budget of $1.59 billion, the government approved an additional $290 million to fund the construction.
“It’s now possible it could approach $3b, which would make it one of the most expensive hospitals ever built in the Southern Hemisphere,” Minister Chris Bishop said.
“This cost simply cannot be justified when hospitals around New Zealand are crying out for maintenance, upgrades, and new facilities.”
Bishop has expressed his concerns on the badly needed infrastructure upgrades to Whangārei, Nelson, Hawke’s Bay, Palmerston North, and Tauranga hospitals, which could be jeopardised if the budget for Dunedin Hospital continues to exceed expectations.
The government is looking at two potential options to advance the project within the $1.88 billion budget. The first option involves revising the project scope, which may include reducing the number of floors or postponing the fit-out of certain areas. The other option entails a phased development on the former hospital site.
These recommendations stemmed from a report carried out by Australian health infrastructure expert Robert Rust, which was commissioned earlier this year.
The 72-page report indicated that the proposed outpatient facility, designed to include outpatient services, clinic rooms, day surgery areas, and planned radiology, was in a “relatively settled commercial state until completion.”
The proposed inpatient building, which is on the site of the former Cadbury factory, presents significant concerns, with “too much risk and uncertainty in the current ‘hybrid’ cost estimates and the contingency and risk allowances for the inpatient building at the time of this review,” as indicated in the report.
The inpatient building is said to accommodate the emergency department, intensive care unit, operating rooms, inpatient wards, and a specialised primary birthing unit.
While Bishop maintained that “the people of Dunedin are going to get a hospital,” the final form that the hospital would take had yet to be decided.