It's official: Government signs contract for new Dunedin hospital

After years of delay the government has finally signed a contract to build the new Dunedin Hospital's inpatient building.

Australian construction giant CPB will undertake the build, as revealed by the Otago Daily Times in July.

Speaking at the project site Health Minister Simeon Brown described the $1.88 billion project as a "key priority for the Government".

The build is New Zealand’s single biggest health infrastructure project and would provide more than 900 FTE jobs and contribute around $100 million annually to Dunedin’s economy at the peak of construction, he said.

Health Minister Simoen Brown at the Dunedin hospital contract announcement with Dunedin Mayor Jules Radich (left). Photo: Peter McIntosh

Construction resumed at the former Cadbury site in July, beginning with foundations and pile caps.

A crane will be in the sky mid-next year, with the hospital due for practical completion in 2030 and open to patients in 2031.

In January, after the latest round of delays and a public march by thousands last year, health minister Simeon Brown promised work would resume mid-year.

Billboards proclaiming CPB's involvement in the hopsital went up in July around the former Cadbury factory site. Photo: Stephen Jaquiery

Dunedin Mayor Jules Radich said the build should have happened in 2018, but in July described the activity on-site as "very exciting after such a long delay ... hopefully, it means a rapid resumption of work — the sooner the better."

CPB had expected to sign a contract at the start of 2023, after it had already spent 18 months delivering an Early Contractor Engagement contract (ECE) for the project.

The ECE, signed in August 2021, had required it to plan the build and pull together a team of subcontractors.

For the past two years, the firms have been waiting for a minister to approve the project and CPB has been involved in government discussions about contract details.

CPB has a history of delivering government projects that have resulted in challenges down the track, including rising costs, delays and legal wrangles.

Projects have included the North Island’s Transmission Gully motorway, the Christchurch Hospital acute services building and the Christchurch Parakiore sports centre, which CPB had claimed was costing more than three times as much to build as originally contracted.

In April last year, the ODT unearthed a government briefing about the new Dunedin hospital, from treasury officials to finance minister Nicola Willis, saying HNZ was "reconsidering whether to continue" with CPB on the inpatient build, despite being the preferred contractor.

Since the Treasury note, there have been further delays, including redesigns aimed at achieving savings and even a review of whether the build should go ahead.