Sources have told the ODT that hospital project planners have been warned a budget blowout of at least a further $100 million is forecast for the new hospital, which had its budget boosted from $1.2 billion to $1.47 billion before construction even started.
Planners implementing all health infrastructure projects, including the new Dunedin Hospital, have been asked to revise budgets as inflation, the worldwide shortage of skilled labour and building supplies, and the ongoing war in Ukraine have put severe pressure on the construction sector.
Clinicians have strongly resisted attempts to implement what they believe would be severe and medically irresponsible cuts to the hospital budget.
It is understood planners have accepted that the likely increase in the cost of building what has been touted as the most modern hospital in New Zealand is so large it cannot be met by cuts to the building’s size or services alone.
The to’ing and fro’ing means the larger and still unconsented inpatient building, to be built on the former Cadbury factory site, is now considered likely to open in 2029 rather than 2028, as scheduled.
Builders are now constructing the smaller outpatient building at the northern end of the central city site. It is understood it is largely unaffected by the clouds over the inpatient building, but that it too could miss its planned mid-2025 opening date due to other issues.
There was no response from the office of Finance Minister Grant Robertson when asked if there had been any approach to him about the anticipated extra cost of the hospital. A contingency to cover potential cost escalations on the project was set aside in this year’s Budget.
A spokeswoman for Health Minister Andrew Little said his office was unaware of any developments regarding the budget or timelines of the new hospital, other than the costs review which was still being undertaken.
The ODT has been told the costs review has been a contributing factor to the ongoing budget and timeline issues as it has required expensive and time-consuming redrafting of earlier plans, which in turn have had to be debated by stakeholders.
The review process has been hotly contested by clinicians in particular, who it is understood have argued strenuously that proposed cuts would put unforgivable strain on the new hospital and could lead to adverse health outcomes for its future patients.
The ODT reported on Saturday that the ongoing fight to stop a dramatic decrease in the size of the inpatient building had appeared to have staved off the worst.
However, sources say several aspects of the new hospital design are still being debated and it is possible not all the hospital wards will be finished and ready to receive patients on opening day.
Some are likely to be "shells" and not fitted out for up to 10 years or more, meaning some facilities open on day one, such as operating theatres, will need to be used for longer each day to cater for projected demand.
That is considered by some to be more politically palatable than a potentially highly controversial major redesign of the hospital, given strong public opposition when the ODT revealed in July that budget pressures were driving reconsideration of how many beds and operating theatres would be in the new hospital.
Mr Little has instructed officials he must be consulted if it is recommended there is any change to the size and services proposed to be in the new hospital in its detailed business case, and has said the new hospital must meet the future health needs of Otago and Southland.
