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The five-storey tower will be more than half empty because the DHB does not have enough money to put beds in it.
The hospital's bed shortage is among the worst in the country. It has demolished more than 40 buildings since the 2011 earthquake.
It is the busiest trauma centre nationwide.
Its medical specialists have pleaded for two towers: Tower 3 with six floors of wards within five years, and a Tower 4 shortly after. The new Acute Services Hagley building already has two towers.
Its Clinical Leaders Group took part in 300 meetings spanning three years, and five reviews of patient demand, alongside the board, management, and Health Ministry.
An OIA showed that at one meeting, the Health Minister and Director-General of health were told that health "service failure is almost inevitable", and if "we fail, New Zealand fails".
"We can no longer manage clinical risk with any confidence," the leaders group told David Clark and Dr Ashley Bloomfield.
"Timelines for new facilities are already too late to match demand."
But now, the new board - voted in just last October - has gone against the clinical leaders' pleadings.
At a closed-door board meeting on 1 May, it opted for a "reduced cost" Tower 3, with five storeys but only two of them fitted out with wards - the other three floors will be empty until there's more money for fit out. There is no mention of Tower 4.
The board only confirmed this resolution was passed when RNZ asked about it.
Clinical leaders had made clear to the board that out of five options, this was the least desirable.
It will add about 60 patient beds and modelling indicates these will be full to overflowing as soon as, or soon after, the Tower opens.
The reduced cost Tower 3 is budgeted at $154m, the board resolution says.
The Association of Salaried Medical Specialists said this was a decision based on a "fear of missing out" and "the sin of cheapness".
Its executive director Sarah Dalton said there was "quiet rage" at the Tower 3 decision.
RNZ is seeking comment from the board and chief executive later today.
The board's recommendation goes to the Health Ministry's Capital Investment Committee, which holds the purse strings.
The committee earlier this year sent the more expensive Two Towers options back to the DHB for reconsideration.
The clinicians had asked for a six-storey, fully fitted-out Tower 3, built on the existing podium made for the Hagley building; followed by a nine-storey Tower 4, with bottom floors full of new operating theatres.
It would have taken at least till 2027 to get those.
As a minimum, they wanted enabling works for Tower 4 to begin, while Tower 3 was going ahead.
The two towers would've progressively relieved pressure on existing rundown or quake-damaged buildings such as Parkside and Riverside, that still have 200-300 patients each in them. Riverside has been slated for decommissioning for the best part of a decade.
Dalton said it was extremely dispiriting for the specialists to be listened to by management, but then to be let down by the decision making "further up the tree - the board and potentially the central funding agencies".
"We are beyond disappointed," she said.
An anaemic Tower 3 presents problems for the DHB's master rebuild plan, which took years to finalise and depends on moving into new buildings in order to upgrade old ones.
The Hagley building is the key to relieving that logjam, allowing for the "decanting" of patients and services.
But, plagued by construction faults, Hagley is still not open, two years after it was due. Board reports show the delays have incurred an extra $25m in recent costs at least.
Because of the 10-year lag between conceiving of Hagley and building it, its 400 new beds are already all taken, and less than what the hospital needs right now.
If Tower 4 does not proceed, that worsens the jam.
The setback for staff is psychological; the clinical leaders' briefing to the Minister in 2019 details staff efforts since the quake in often demoralising conditions; the 2019 mosque shootings and Covid-19 have added to that load.
Clinical leaders are sensitive to claims Canterbury has had more than its share of Crown funding since the quakes, and that the two towers are more of the same. However, an OIA shows that amounts to $58m of $700m in capital expenditure since 2010, compared to other larger funding sources of $500m from CDHB depreciation, and $128m from insurance.
Dalton of the Association of Salaried Medical Specialists said the government's hospital facilities funding system that encouraged a "lolly scramble", like the one over Tower 3, had to be changed.
"If it requires $200 or $250m, let's just do it properly and get a proper use and lifespan out of these buildings because they have massive ramifications for people's health."
The board's decision comes while the government is working on a national plan for rebuilding hospitals.