The New Zealand Government is assessing options for the delivery of the New Dunedin Hospital project within its existing funding constraints.
On 26 September, New Zealand Infrastructure Minister Chris Bishop and Health Minister Dr Shane Reti expressed concerns that the project’s increasing costs could compromise planned upgrades for other hospitals in the region.
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The project’s budget was originally set at NZ$1.59bn ($998.8m) under the previous government before being revised to NZ$1.88bn ($1.18bn) in March this year due to increasing expenses.
The project’s projected costs are now almost NZ$3bn, which could position it as one of the most expensive hospitals in the Southern Hemisphere.
An independent review of the project led by Robert Rust, the former CEO of Health Infrastructure New South Wales, was commissioned by the government earlier this year.
The Rust Review has since been made public and indicates that completing the hospital as presently planned is ‘not achievable’ within the sanctioned budget, with particular concern over the cost of the inpatient building.
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By GlobalDataDr Reti said: “The Rust Review makes it clear that, even now, the specifics and scope of the project are still being debated.
“To make matters worse, insufficient money had been set aside for other associated costs such as a pathology lab, refurbishment of the existing facilities and car parking which are collectively estimated at an additional NZ$400m.
“No business cases have been prepared for any of these additional elements of the project.”
The government said that ministers have now instructed Health NZ to develop strategies to complete the hospital within the current NZ$1.88bn budget.
The two main strategies being considered are revising the project’s planned specification and developing a new clinical services building on the old hospital site while refurbishing the existing ward tower to meet immediate needs.
Officials are due to provide expedited advice on these options in the coming weeks.
