In an interview, Mr Ryall said Otago board chairman Errol Millar was constantly "in my ear" over the issue.
The board had been very patient and he understood the frustrations Mr Millar was relaying, but the Government was in a position where demands for capital works were hundreds of millions of dollars greater than the amount of money available.
One of the concerns regarding the Otago situation was that the Government-imposed capital charge on any money allocated would push up the board's deficit.
The board has put forward two options for funding. One is for $38 million for the full first stage of the master site project, which would address problems at the gridlocked Dunedin Hospital site by moving some services to Wakari Hospital.
The other option, which would cost $23.6 million, would involve the core of the first stage and would include relocating the acute mental health ward to Wakari Hospital and upgrading the neonatal intensive care unit.
Much preparatory work has been done on these two projects and the property team has said work could begin within months of approval being granted.
Board chief executive Brian Rousseau commented last week at a public meeting on the merger proposal for the Otago and Southland boards that there were "indications the business plan is getting favourable attention in Wellington".
He said he was hoping to hear very soon.
Treasury officials were making arrangements to come to talk to management about it soon.
Mr Millar said there was a need for capital expenditure to involve more strategic thinking nationally, to work out where the priorities were and set money aside accordingly.
Funding individual health boards without such national planning was not necessarily the right way to go.
Concern about the substandard state of parts of the hospital had been expressed for several years, with Mr Millar saying in May he did not want the state of the board's facilities to be the subject of a negative health and disability commissioner's report.
Among the areas of ongoing concern are the intensive care unit, the neonatal intensive care unit, acute mental health ward, children's ward and the paediatric assessment unit, all of which are included in the full first stage of the master site project which the board has been planning for several years.
Attention has also been drawn to many substandard outpatient areas.
Risks noted included breaches of privacy, lack of infection-control facilities, an unsafe environment for mental health patients and staff, lack of isolation facilities, health and safety issues and the difficulty of retaining and recruiting staff when facilities are seen as inadequate.
