Hospital delay blows out to a year

Ayesha Verrall
Health Minister Dr Ayesha Verrall. Photo: ODT files
Cutting back the design of the new Dunedin hospital was originally expected to delay construction of the inpatient building by less than three months but it has since blown out to nearly a year.

Newly released documents obtained by the Otago Daily Times under the Official Information Act detail three possible responses to a $200 million price jump.

They include an option to save $89 million, which appears similar to the $90 million design cutback announced by the Government in December, although $10 million was restored earlier this month following pushback.

Also announced in December, the completion date for the inpatient building was pushed back from 2028 to 2029.

Te Whatu Ora Health New Zealand (HNZ) last month confirmed the delay of almost one year was due to the redesign.

The newly released documents were written last February and March to Minister of Finance Grant Robertson and former minister of health Andrew Little.

HNZ recommended the second of the three options, in part because it was only expected to delay the inpatient building by less than three months.

"We recommend response 2 because [it]... avoids a major redesign of the inpatient building."

The amount was to be achieved by third party funding for the interprofessional learning centre, facade value engineering, a reduction in major medical equipment and removal of the staff-focused pavilion building and link bridges.

This was predicted to save $17 million, $15 million, $10 million and $60 million respectively.

Removing the link bridges between the inpatient and outpatient buildings "would result in operational inefficiencies and patient transport challenges".

This could be resolved by shifting the inpatient building, and possibly the outpatient building, or by reinstating one link bridge for clinical use, reducing savings by $11 million.

This provided a significant saving without substantially reducing core clinical scope, the document said.

However, the Southern District Health Board did not support the preferred response.

Two other options were also put forward, one to save $50 million and one to save $150 million-$200 million.

The first option proposed third party funding for the learning centre, facade value engineering and a reduction in major medical equipment, as well as the "shelling or removal" of the mental health services for older people inpatient unit to save $8 million-$12 million.

This was described as an option with minimal impact to clinical service delivery.

The third option was "a significant reduction in clinical scope" requiring the clinical service plan to be redeveloped and the concept and preliminary design of the inpatient building to be redone.

It would cause a major delay of more than 12 months.

"The delay of the construction commencement date would also expose the inpatient building to a further cost escalation if current market pressures are sustained," the report said.

National Dunedin list MP Michael Woodhouse said he had no confidence in the Government to complete the build within the timeframe, and delay was the biggest cost pressure.

"The base concern that I have is that this is just taking far too long."

It was "staggering" to see they were still considering where the two buildings should be located five years into planning, he said.

"From a design perspective, there must have been a heck of a lot of money being spent on designs that kept changing, and I would be fascinated to know how much money has been wasted on design, and redesign, and subsequent design."

He also criticised the report for redacting project contingency costs, as he had been trying to discover if this had changed.

In a written parliamentary question to Minister of Health Dr Ayesha Verrall in February, he asked if the detailed business case estimate of an 85% chance contingency costs would be sufficient still stood, or if not, what the new estimate was.

Dr Verrall replied only that she was advised the contingency in place was sufficient.