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The Fraser Building, part of the Dunedin Hospital complex in Dunedin, needs a new roof, at a cost of up to $800,000, Southern District Health Board members heard yesterday.
Finance director Peter Beirne told the board meeting in Dunedin, it was hoped the actual cost would be less.
The project was deemed maintenance, meaning the work would not necessarily extend the life of the facility.
After the meeting, Mr Beirne told the Otago Daily Times he had been advised the roof could no longer be patched up but needed full replacement.
He was not sure when the work would be carried out.
It is one of the reasons the board's deficit could be higher than expected; board members were told yesterday it could top $9.7 million.
Chairman Joe Butterfield emphasised management was still aiming to meet its budget target.
''That's what the board needs to understand - that management has not given up on meeting the $9 million forecast.''
The board faces a maintenance ''dilemma'' because of uncertainty over when the Dunedin Hospital campus will be upgraded, the chief executive's report to board members said.
The board wrote last year to the National Capital Investment Committee, in Wellington, asking for guidance about the problem.
The committee recently visited Dunedin Hospital, holding its March meeting in Dunedin, the report said.
''The letter reiterated that it is clear there is a need for substantial investment in the Dunedin campus, and Southern DHB faces a dilemma between maintenance of ongoing service provision and avoidance of wasteful medium-term expenditure in the absence of an agreed master plan.''
Chief executive Carole Heatly told the ODT the board was awaiting the committee's response.