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Construction of Dunedin’s new hospital will send ripple effects across Dunedin, but Mayor Dave Cull says some "collateral damage" is unavoidable.

Mr Cull welcomed yesterday’s announcement the new hospital would sprawl across more than two city blocks, including the Cadbury site and the "Wilsons block" north of St Andrew St.

Mondelez International has responded by announcing it would close Cadbury World, with the loss of 39 jobs, while a cluster of businesses on the Wilsons block were also under a cloud.

Despite that, Mr Cull said the certainty provided by yesterday’s announcement at least gave businesses, the council and the wider community a chance to plan in detail.

Otago Chamber of Commerce chief executive Dougal McGowan agreed it was "great" to finally have certainty, but good planning was now essential.

The city needed to co-ordinate the hospital build, central city upgrade and bus hub project, which could otherwise cause "total disruption" on threeneighbouring north-south routes, Mr McGowan said.

"It’s an exciting time . . . but it has got to be led and managed really well."

Mr Cull said the council had already given the Ministry of Health an assurance it would streamline the planning process, to try to smooth the project’s path to consent.

Council chief executive Sue Bidrose said options included a change of zoning for the site, or a referral straight to the Environment Court, to accelerate the process.

A selection of options, together with likely timeframes, had been given to the Ministry of Health, which would make a final decision, she said.

Work was also "well under way" to consider transport challenges posed by the new hospital, ranging from construction disruption to extra parking demands and vehicle movements, she said.

The possibility of realigning St Andrew St, and even converting the city’s one-way streets to two-way, were among the options to be considered, she confirmed.

Otago Regional Council deputy chairwoman Gretchen Robertson said that she was pleased to see the hospital would be built in "very close proxi-mity" to the planned bus hub in Great King St.

The location of the two would offer "many synergies", and there were "no foreseeable issues", she said.

Mr Cull said the impact of construction on surrounding on-street parking would also need to be considered, but the new build gave the city options for improved hospital parking in the longer-term.

"The bottom line is you’re not going to make an omelette without breaking some eggs. The construction site of a [hospital] project is going to have some collateral damage."

chris.morris@odt.co.nz