Sooner or later this absurd debacle must end. Sooner or later the construction of the new Dunedin hospital will get under way.
But what, where and when?
Some things are clear. Ministers are not going to announce that their ham-fisted intervention of last September was a mistake. They will not acknowledge that the costs were already coming down, or that the existing design is eminently fit for purpose.
Ministers will not admit that their claim of the costs ballooning "towards $3 billion" was bunkum, though they knew at the time the costs on a like-for-like basis were about $2.1b. Nor will they acknowledge their pre-election promises are broken.
Politics, the art of the possible, has now intervened. If the project is to proceed, the public must play the game of "the least harmful alternative" — and remember at the ballot box.
I happily rely on the opinion of the Clinical Transformation Group (CTG), a group of mainly clinicians who have been engaged with the project for years and who know it inside out. Their judgements are always thorough, balanced and firm.
They will know whether some "least harmful alternative" can be made to work, or not.
So far, the leaks into the public arena indicate the removal of the sixth floor and a rearrangement of surgical theatres, probably with the loss of two theatres in the process. Other changes are undoubtedly in play too.
Suddenly, an important question arises. Will the sixth floor be "cold shelled", meaning that it will exist but be empty? Or will the sixth floor disappear entirely?
The answer matters. Should it be cold shelled, then at least the new hospital has a chance to expand as demand grows in coming years. Future flexibility can counter today’s political shortsightedness. The cost difference is just $30m. At that price, a cold shelled sixth floor becomes a very cheap piece of hospital real estate.
So, a politically expedient solution begins to take shape, if it is clinically acceptable. The sixth floor is cold shelled, and the government can trumpet that the project will restart. The government can generously relocate the two missing theatres to Kew Hospital in Invercargill — quietly ignoring the fact that they have been planned there for the past two and a-half years.
Even the problems with pathology can be overcome if the sixth floor is leased to the private sector provider for a decade or two, until future clinical needs take precedence.
Will it come in under the $1.88b budget? The answer is "it can be made to", if only by massaging contingency allowances. Much of the gap between the $1.88b limit and the (about) $2.1b estimate had already been reduced in the two to three months before ministers rode into town in late September.
The reason is that, as a building design approaches completion, cost estimates become more accurate. Final negotiations begin. The principal contractor and key subcontractors have increased certainty. Risk premiums reduce; pencils are sharpened.
The gap has of course been closed further by reducing the hospital itself. The government will want to claim a cost of $1.88b. The actual outturn will surely be higher.
All of this ignores the option of refurbishing the existing Ward Block. That was the second option ministers wanted to explore. It was a ludicrous idea then, as it is now. Having consumed considerable time and energy, one assumes it will quietly die.
Yet this government has not finished meddling. Pre-Christmas, ministers were actively second guessing the commercial suitability of CPB, the company holding the Early Contractor Involvement (ECI).
This is a construction contract where the principal contractor is engaged at an early stage in a project to offer input into the design phase.
Ordinarily the ECI would be converted into the final contract, assuming any commercial concerns have been addressed. But now ministers seem to be relitigating that, according themselves an acute commercial judgement I doubt they have.
Taxpayers need not be concerned about who does or does not build hospitals. As a large multinational, CPB has plenty of detractors and supporters.
But we should be concerned when politicians think they know best in these matters.
More to the point, ministers are telling the entire Australasian construction industry that the New Zealand government is a risky client. The Crown is usually thought of as a good client. The jobs are big; the bills get paid.
But if political meddling becomes the norm, large construction companies will add that risk to the price. Building costs in New Zealand will rise accordingly.
Ministers need to come to a decision fast. Southerners have had enough delay and enough meddling.
Time the government started governing.
— Pete Hodgson is a former chairman of the new Dunedin hospital governance group, a former chairman of the Southern District Health Board and a former Labour Minister of Health. He is not a health professional and has no construction experience.
