Frantic bid to bring down cost of new hospital

Waitaki District Mayor Gary Kircher. Photo: Peter McIntosh
Waitaki District Mayor Gary Kircher. Photo: Peter McIntosh
Health New Zealand will spend the next three to four weeks frantically trying to bring down the cost of the new Dunedin hospital while avoiding clinical cuts, the Otago Daily Times has been told.

On Monday, southern mayors had a Zoom conference with Health New Zealand Te Whatu Ora (HNZ) infrastructure lead Blake Lepper to discuss the project.

Waitaki District Mayor Gary Kircher said Mr Lepper told the mayors it would be "another three to four weeks before he finishes his current process of getting the project back under the latest $1.88 billion budget".

Mr Lepper told the mayors cuts to services would be the "last resort", Mr Kircher said.

"I believe we finished the meeting with a more optimistic view that we are on a better path towards getting a hospital we deserve, though there is still a lot of work to be done in a short time."

Mr Kircher said he understood Mr Lepper was working as hard as possible to avoid any cuts to services, but looking at "lower tier" priorities.

"The cladding could be corrugated iron for all I care as long as the services are retained.

"We want to make sure any changes won’t make any difference to the services inside.

"Everyone involved is naturally nervous. Obviously, Mr Lepper is under the pump trying to make this work."

Mr Kircher’s comments come after the Otago Daily Times was leaked documents which showed Australian construction giant CPB’s initial pricing to HNZ at the end of July was significantly over budget.

New costings from the company were due to land on the government’s desk on September 16.

Mr Kircher said at the meeting the mayors were also given more clarity about how Infrastructure Minister Chris Bishop reached the estimation the cost of the new Dunedin hospital had spiraled to "approaching $3 billion".

The figures they were given came closer to $2.9b, which included previously out-of-scope items such as the demolition and reuse of the old hospital building and a pathology building.

"There appears to be a bunch of stuff in no-man’s land when it comes to responsibility," Mr Kircher said.

The meeting with the mayors came after last week’s announcement by Mr Bishop and Health Minister Dr Shane Reti.

The ministers, in response to ballooning costs, proposed a scaled-down version of the project at $1.88b, or retrofitting the present Dunedin Hospital.

Mr Kircher said the mayors also got a better idea of how many services were intended to remain in existing buildings rather than transfer to the new buildings.

"It gave a better context to the potential redevelopment of buildings that already exist and for which a better business case can be made."

Bryan Cadogan
Bryan Cadogan
Clutha District Mayor Bryan Cadogan said he left the meeting satisfied Mr Lepper would do everything in his power to deliver a hospital the South deserved, but he was less confident about the government’s manoeuvering.

He wanted more clarity on Mr Bishop’s claim the original project would now cost up to $3b.

"If the public’s meant to accept that their hopes and dreams for the health services that they deserve have been obliterated, at the very least, the public has a right to those figures.

"If it was council, we would have to bring them out."

Mr Cadogan said he wanted to know where the campaign would go next.

"While the poker is hot, we’re going to keep prodding because if we don’t, it will all just dissolve away in a matter of days."

Mr Lepper deferred all comment to the mayors.

A spokeswoman for Mr Bishop did not respond to questions about the $2.9b figure yesterday.

Earlier this week, Mr Bishop provided an explanation for the $3b, and said the figures sprang from a total appropriation of $1.88b.

"Recent cost estimates came in several hundred million dollars over that appropriation.

"Plus about $400 million for pathology lab, car parking, reuse/decommissioning of buildings.

"All up, approaching $3b. I can’t go into further detail at this stage due to commercial sensitivity."

matthew.littlewood@odt.co.nz