Risks and hurdles expected but ‘all is on track’ for now

Latest design proposal of Dunedin's new hospital. Image: Warren and Mahoney Architects
Latest design proposal of Dunedin's new hospital. Image: Warren and Mahoney Architects
The challenges facing the new Dunedin Hospital are "no better or worse than they have always been", project steering group chairman Pete Hodgson says.

Mr Hodgson yesterday defended progress on the construction project, after the release of a Cabinet paper that said it would go over its $1.4 billion budget and there were serious concerns whether it would be completed on time.

Pete Hodgson. Photo: ODT files
Pete Hodgson. Photo: ODT files
A second Cabinet paper released to the Otago Daily Times confirmed the project had also exceeded its budget to buy the land for the new hospital.

Despite the difficulties, Mr Hodgson said the hospital remained on track and the size, shape and estimated completion dates remained unaltered.

"The public should take comfort that all is on track," he said.

"There will undoubtedly be multiple risks and hurdles in front of us and some of them might be big, but to date we are making steady progress."

The project’s final budget was not known because digital costs, which are to be apportioned between the Southern District Health Board and the Ministry of Health, were the subject of a separate business case, Mr Hodgson said.

"A process known as quantitative risk analysis could not be completed in time for the August Cabinet paper because the concept design had not been finished.

"That concept design is now approaching final sign-off, and quantitative risk analysis began earlier this week."

In the Cabinet paper, Treasury highlighted its concerns about the project’s detailed business case being granted in-principle approval - a decision Cabinet approved in September.

It said the current version of the plan lacked sufficient detail and, without the risk analysis, standard assurances about costs were missing.

Making that warning was Treasury’s job, Mr Hodgson said.

"They also pointed out that building a large hospital in a small city a long way from other labour markets would mean that finding enough skilled people to construct it would be a challenge and that delays were therefore possible."

Hospital planners had spent two years putting together programmes to try to increase the labour pool available for the building work, he said.

"It is why we have a skills hub opening soon and it is why Otago Polytechnic are building a new trades training facility.

"These sorts of initiatives won’t guarantee we will get all the labour supply issues sorted but they give us a much better chance than if we did nothing."

Meanwhile, a second Cabinet paper showed then health minister David Clark had to approach his colleagues earlier this year to draw down from a contingency fund to buy properties in Hanover and Cumberland Sts for the hospital’s planned "interprofessional learning centre".

The project had already spent its $75 million funding for land purchases, but an undisclosed contingency sum had been set aside in the 2019 Budget for design and procurement costs, Dr Clark said.

"Approval for the drawdown at this stage is extraordinary and [I] do not anticipate needing to make a similar request prior to the presentation of the detailed business case."

The properties bought through the drawdown were earmarked for the centre, as well as for long-term expansion space for some clinical services and health research.

The amount of the drawdown was redacted from the paper, but in documents lodged by the health ministry in support of its application to demolish the former Cadbury factory, its lawyers said "approximately $84 million" had been spent on land acquisitions.

mike.houlahan@odt.co.nz

Comments

Quote: "A second Cabinet paper released to the Otago Daily Times confirmed the project had also exceeded its budget to buy the land for the new hospital."
What a mess. I can't believe what a grave loss of potential DCC and the National government let pass by. A history reminder. The DCC buys Carisbrook from the Otago Rugby Union for $7m to bail them out, using RATEPAYER MONEY. Then, 4 years later, sells the ground for $3.5m to Calder Stewart. Losing RATEPAYER MONEY.
Now we see a budget blowout purchasing the Cadbury block for a hospital to be built on ground that has an unknown capacity. The site is restrictive and congested, access will be a nightmare, and the costs are mounting up, all Hodgeson can say is... "The public should take comfort that all is on track,"
A useless council, useless planning, and even more useless consultants happily dipping into seemingly endless public funds, digging a deeper hole and creating an eye-watering financial mess.
"Take comfort" - are you kidding me?
Bureaucratic highly-paid seat warmers. The lot of you should be ashamed.
Had my rant ... as you were ... 'I'll get back to paying ever increasing taxes/rates to help fund the madness.

Don’t get sick in Dunedin. This project is floundering already.

Boomers banging on. Seriously you talk about rate payer money as if it’s some kind of holy grail. This city was built on forward thinking and on restricted access. This deficit thinking would get nothing done. Constant prattling about council is equally negative. They’re people like you and I who have stuck their hands up. All power to them!

I'm not a Boomer, I'm GenX, and in fact, who gives a noddys toss what generation anyone here is from. I'm highlighting the ongoing waste of public money based on the very poor planning and decision making that perpetuates on behalf of the public. You often make discussions here a generational dividing event with your 'Boomer' diatribe. Your broad brush places all blame at their feet. Increasingly I see people here bagging so called 'Boomers', The term is becoming a form of subtle shame, nastiness and abuse. There are thousands of so called Boomers out there struggling, leave them alone. To Quote you: "This City was built on forward thinking", which exactly highlights my previous post, there was NO forward thinking when considering the hospital build. The thinking is so late, they are only now testing the ground! You say, "All power to them"? that's the problem Mikenette, they have the power to continue making very poor financial and planning decisions year after year after year after year.....it's no wonder people feel negative. One day, you too will get tired of paying for all the mistakes. Have a great evening, hope your generation does a better job.

I will continue repeating - this hospital build will never happen. It just wont. Sorry Dunedin but you can only blame yourself.

So sit back and relax and watch Invercargill and Christchurch prosper!

 

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