Instead, it is trying to reduce the redevelopment to come within a total budget of $85 million.
In its annual plan, approved by Minister of Health Tony Ryall this week, the board says population projections suggest "considerable" extra floor space will be required in Dunedin Hospital, but it cannot afford the estimated $150 million needed for all improvements.
Board finance and funding general manager Robert Mackway-Jones said the plan's $150 million figure was from the original master site plan involving both Wakari and Dunedin hospitals.
This plan, developed some years ago, was "being refined" and was "more likely" to target about $60 million of development, he said.
This would be on top of $24.4 million allocated to projects a year ago, including shifting the acute mental health ward from Dunedin to Wakari Hospital and revamping the children's ward and neonatal intensive care ward on the Dunedin site. All of that money will not be spent until 2013-14.
In his approval letter, Mr Ryall says his acceptance of the plan does not indicate support for any capital projects requiring equity or new lending, or for self-funded projects requiring the support of the Capital Investment Committee.
Approval would depend on sound business cases, and evidence of good asset management and health service planning by the board.
The plan said without capital funding the board would need to develop other ways to manage the need for extra space. This would involve best use of all hospital bed capacity, including that of rural hospitals, as well as focusing on care in the community.
This year's budget shows proposed capital spending includes $6.33 million on a new linear accelerator, $2 million for a new observation unit for the emergency department, and $1.821 million on the upgrade of the gastroenterology suite (with a further $729,000 to be spent on this next year).
In the medium to long term, significant spending would be needed at Dunedin Hospital to maintain quality standards compliance.
The plan referred to the need for upgrading the intensive care unit, the high dependency unit, the main operating theatres, the day-stay unit and outpatient areas.
The plan also repeated warnings about the board's difficulty finding money to replace equipment. Many items were only replaced when they broke or lost "complete functionality", it stated.
The plan includes a $3.4 million allocation to redevelop the western wing of Southland Hospital's old hospital building.
Staff were evacuated from the old stand-alone administration building and nurses' home earlier this year because those buildings were structurally unsound.
The possible need for spending on Queenstown facilities for the integrated family health centre concept was also mentioned, although it noted options were still being explored.
