While details remain sparse, Southern District Health Board deputy commissioner Richard Thomson confirmed the price-tag was ``definitely north of $5million''.
Speaking at a Grey Power meeting yesterday, he said it would submit an application to the Queenstown Lakes District Council in the new year and that building work was likely to begin in the second quarter of 2018.
The upgrade would include installing a CT scanner, more than doubling the capacity of the existing emergency department, adding a diagnostic service, providing an ultrasound facility and refurbishing the maternity and outpatients units.
While Queenstown Lakes District Mayor Jim Boult welcomed the spending, he said it fell short of what was needed in an area of such huge growth.
He attended the start of the meeting in Frankton, but had to leave because of his own ``medical emergency'' - a dentist appointment to have a tooth removed.
Speaking last night, Mr Boult said he was ``disappointed'' the deputy commissioner ruled out a new hospital facility.
``This is not a permanent fix. This is just buying us more time.
``I appreciate the step in the right direction but we still need a long-term solution.
``Tell me how you can have what will be the second-largest population centre in the district without a decent hospital.''
About 50 local people turned up to hear Mr Thomson's views on the future of Wakatipu health services.
In September 2014 the SDHB said it could not afford an upgrade because of the planned rebuild of Dunedin Hospital.
This was overturned in August last year when new plans, including the new CT scanner, were announced.
Some who came to hear Mr Thomson were critical of delays to the changes.
One woman questioned SDHB management, another suggested maternity services were not up to scratch and one man raised bed occupancy.
Mr Thomson admitted things were not rosy.
He described existing facilities as ``unacceptable'' and ``substandard'' but stressed the upgrade would address those issues.
He pointed to the different factors driving demand in the area, population growth and visitor numbers.
He referred to drunken behaviour and skifield accidents as further pressure points.
Mr Thomson said a new hospital was not the answer.
``The problem is how you provide the services in that hospital.
``You need to make a distinction between the facilities and the services you provide.''
Speaking after the meeting, he said the revamp was adequate to meet Queenstown's needs.
He also said the decision was based on a full review of the facility.
In addition to the upgrade, the DHB would look at improving services locally, rather than shifting people to Invercargill or Dunedin for treatment.
``We have to look at what the data is telling us and we have to build for that data. We are trying to be really clear that this will be a progressive process.
``We are building on what that tells us will happen over the next five-seven years, not the next 50 years.
``We are not doing anything that will stop us continuing to adapt that process.''
Mr Thomson said it was a ``balancing act''.
``It may be two steps forward and one step back and we wonder how many rocks we have yet to turn over and what ugliness you may find under them. But my question is, `are we making progress?' and, yes, I think we are.''
More details on the upgrade are expected next week.
