The delay emerged in a Health New Zealand Te Whatu Ora (HNZ) briefing released under the Official Information Act.
The document, addressed to Health Minister Shane Reti and Finance Minister Nicola Willis on March 18, sought the "urgent" approval of a request for additional funding to address immediate cost pressures for the Waitematā E Tū Wairua Hinengaro Mason Clinic Redevelopment project — which would fund the replacement of current facilities at the Auckland-based mental health clinic.
The amount of funding requested was redacted.
HNZ noted in the briefing there was a delay in securing approval for the cost increase to the project "due to new cost pressures for the new Dunedin hospital", it stated.
Costs to the redevelopment project had increased by an additional $1.6 million as a result.
"HNZ was required to confirm its intention to proceed with construction by 29 February 2024, but this was delayed until the funding source for the new Dunedin hospital cost pressure was confirmed," it went on to say.
The document later said cost escalations across the portfolio had been known for some time "and the risk remains of additional costs emerging for projects continuing to experience cost pressures".
A spokeswoman for Dr Reti’s office said the minister had "always acknowledged that there are many challenges with new Dunedin hospital".
"The recent revelations about the dire state of Health New Zealand’s finances means that now more than ever, we need to ensure every public dollar available to health is spent wisely."
Dr Reti had tasked HNZ commissioner Lester Levy to come up with a turnaround plan for HNZ and was currently anticipating details, she said.
The new Dunedin hospital remained "under active consideration" as the government worked to deliver an important health facility that represented value for money.
The additional funding required for the Mason Clinic redevelopment was approved in March, the spokeswoman said.
An update report on health capital projects dated January 31, also released under the Official Information Act, revealed a detailed design of the new Dunedin hospital’s inpatient building was expected to be completed by December 17.
It said the cost pressures for the inpatient building remained, based on continued inflation and exchange rate changes.
An updated cost estimate for the hospital would be included in the Implementation Business Case that would be due in Cabinet in December, it said.
It comes after a Treasury report released this month highlighted concerns about the delivery of large infrastructure projects in general and revealed the government had increased the number of ministers overseeing the new Dunedin hospital amid concerns about rising costs.
The project was initially budgeted at $1.59 billion, but the Otago Daily Times understands the costs have ballooned to more than $2b.
