Former Labour health minister Pete Hodgson - who oversaw the early years of the project - said the reappointment of Evan Davies to head the project had finally brought the government on track, but constant delays over the contract had led to a situation where inflation alone would have added an extra $40m in costs since the shutdown in September.
"Critically, Evan Davies has convinced the new Health Minister Simeon Brown that a fixed price contract for a job such as this will not work, and that a return to some sort of shared risk arrangement is a superior strategy."
In September last year, the government pressed pause on the project to deliberate over whether to build a slimmed-down version of the hospital at the former Cadbury site, or retro-fit the existing Dunedin Hospital.
This decision caused a major uproar in Dunedin, and at the end of the month, more than 35,000 people marched in protest of the government’s act.
"The fixed price approach was a consequence of ministerial vainglorious behaviour last September.
"Then, two ministers rode into town, misrepresented the truth, and caused work on the inpatient block to stop.
"They said the costs were out of control and that they weren’t going to pay a cent over $1.88billion. That became the fixed price, no matter what."
Mr Hodgson said the government’s performance in recent times was a "U-turn, pure and simple", but "one that was overdue".
"The government has finally stopped accelerating down a cul-de-sac. We might at last start building a new hospital."
The Otago Daily Times approached Mr Brown for comment.
He did not answer any of the questions, and instead sent a statement.
"I have appointed Evan Davies as a crown manager, tasked with the delivery of Health New Zealand’s new Dunedin hospital inpatient building.
"Mr Davies holds full authority for progressing the delivery of this project on behalf of Health New Zealand. That includes making personnel decisions necessary to get the job done.
"Mr Davies understands expectations. He brings the experience and leadership needed to ensure this critical piece of infrastructure is delivered.
"We are getting construction back under way. Capping of the 324 piles on the site will begin mid-year, followed by work on the perimeter of the basement to form the base for the substructure. The third part of the process will be installing the base isolators and then the frame of the main construction."
Late yesterday, the Otago Daily Times received a notice from construction firm Ceres about the project.
It said consented work was now under way on the inpatient building.
"The earthworks, dewatering and concrete foundation construction works will generate noise, vibration, and potentially dust and sediment effects for the occupiers of surrounding properties."
