When Health Minister Dr Shane Reti and Infrastructure Minister Chris Bishop travelled to Dunedin, the people of the South received a bombshell; news that the hospital would not be delivered as promised, justified by claims the project’s costs were rocketing towards $3 billion.
These claims are contradicted by the ministers’ own Independent Expert Readiness Review from Robert Rust even though it was released with some key financial information withheld.
It states that the approved building budget is $1.88b. Other costs such as $225 million for IT, $45m for pathology and many millions more for parking are extraneous to the build cost and it is disingenuous for the ministers to try to add them in at this stage. A figure of $325m for reuse or decommissioning of the old ward block has been plucked out of thin air and forms no part of any build budget. Add about $350m for high contract pricing and there’s your extra billion.
The only applicable cost is the high, first-cut contract price and that extra $350m is being squeezed determinedly downwards by infrastructure experts, so we’re really talking about a gap between $1.88b and $2b. Thankfully, Prime Minister Luxon rounded the figure to $2b while here in Dunedin on Monday so that’s an easier number to use.
This hospital project has been long in the planning — it was mooted 14 years ago in 2007 and finally announced in 2017 by then prime minister Bill English. He said a complete rebuild was the economically efficient way to go and it was "a step that needs to be taken to provide the next generation of health services across the South". The price was $1.2b to $1.4b. The cost has risen to $2b in line with inflation, but not $3b as claimed.
However, it has certainly risen with delays, and delays cost money.
The scope of facilities and services for this new southern region tertiary hospital have been decided and agreed upon by clinicians, health professionals and relevant experts. Expectations and budgets have been tested, tightened, trimmed, value managed and peer reviewed. The hospital is the size it needs to be. To build anything less will put health and lives in the southern half of the South Island at risk. Inpatients and outpatients also need to be connected as planned for efficiency and safety.
Talk of refurbishing the 50-year-old ward block is a travesty. Not only was the comparable cost of refurbishment versus new build shown to be about the same in a Sapere Report in 2017, but the lifetime expense of a renovated building is much higher. How on earth could a building be efficiently fully refurbished while running a hospital inside it?
What was promised was a new hospital and all indications are that it can indeed be built on the piles already in the ground and the plans already in the site office, for $2b.
Mr English also said the Dunedin hospital rebuild was part of a commitment to "a world class health system" and would be "one of the largest construction projects in New Zealand" so let’s not be pretending the size is a surprise, let’s just get on and get it done. This southern region tertiary hospital is vital for the health and protection of over 350,000 people in Otago, Southland, Waitaki and beyond. It needs to be the right size. Lives are at stake and our lives matter, certainly to us. Do they matter to the government?
This hospital will also provide training for our nation’s healthcare clinicians who need a cohesive, efficient facility. A high-quality, fully provisioned resource is required to attract and retain the right people.
The prime minister agrees, or at least he did on the campaign trail when he said: "We’re going to build this hospital back to the specification that was originally intended, in terms of giving us the capacity we need, and that we will need for the future with the generations to come".
The voting public of Otago and Southland certainly want them to and 35,000 of them turned out on the streets of Dunedin just over a week ago to say so.
Last year, one media headline read: "Trust us: Luxon says Dunedin’s new hospital will be future-proofed if National wins the election."
Dr Shane Reti posted: "I’m proud to be with Michael Woodhouse in Dunedin this morning, where we announced that the next National government will build the hospital Dunedin needs, with all the beds, operating theatres and radiology services that Labour removed."
Our message to the political decision-makers in Wellington is simple: It’s time to honour your commitment.
If this commitment means nothing, what commitment means anything?
We’re not going to accept broken promises and a hospital that fails the people of our region.
It’s not too late to do the right thing.
Keep your promise to build the hospital the South needs, with no cuts to clinical services or facilities.
In the meantime, our campaign will continue. After last week’s magnificent march and thousands of postcards sent to ministers since, we are preparing the southern hospital rescue ambulance ready to go on a road trip around Otago and Southland.
But first, we need to give our ambulance a better name. If you can think of one, enter the competition on the theysavewepay Facebook page.
This isn’t over. We’re just getting started.
