Treasury queried Uni exclusion from rebuild

A decision to exclude the University of Otago from the Dunedin Hospital rebuild was queried by Treasury, advice released under the Official Information Act reveals.

The Ministry of Health told Treasury the rebuild was ‘‘a health project and that is the focus’’, so it excluded the university and Otago Polytechnic.

Treasury officials pointed out an education provider could help pay for the new hospital.

‘‘The model of care is pointing us to a new site; ministers are being asked to make a decision about two sites.

‘‘If we overlay the education provider it could make a difference.’’

Treasury officials advised the ministry to be clearer about the state of Dunedin Hospital and why a new one was needed.

‘‘[The ministry] advised ... it will be challenging to sweat these assets.’’

‘‘Recommend that this is clear [in the business case] ... the level of risk that is being managed.’’

Officials had talked about the risk of building a hospital that was ‘‘too big’’.

The ministry said the design would reflect a planned shift of some services into the community.

The advice, which is several months old, was released by the Treasury.

It also released a March email talking about the big budget increase caused by the realisation the main ward block had to be rebuilt.

‘‘I just received a heads-up this morning that Minister [Jonathan] Coleman will be raising the potential for a significant increase in the scope of the Dunedin Hospital project ...

‘‘This would come with a large upfront price tag, but would open up procurement opportunities [for a public private partnership] and require less compromise of benefits to integrate with existing buildings,’’ a Treasury analyst wrote.

Last month, Prime Minister Bill English announced a $1.2billion to $1.4billion rebuild after Cabinet approved the business case.

The Government hopes to use private finance to build the hospital. A central city build is preferred, but it might be built at Wakari Hospital.

The Ministry of Health said in a statement it had moved to the next phase of the process and was working ‘‘constructively and closely’’ with the university.

eileen.goodwin@odt.co.nz

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