Key points:
- Health Minister Dr Shane Reti defended the Government’s announcement that it would seek advice on two options for delivering the new hospital project after a cost blowout.
- Over the weekend, 35,000 people across the region protested the move.
- Reti said the Government had invested a further $290 million into the project.
- He said the original budget failed to account for several costs, which would have made the build too expensive.
Health Minister Dr Shane Reti has defended the Government’s decision to potentially downgrade Dunedin’s proposed new hospital after 35,000 people showed up across the region to protest the controversial move.
On Friday, the Government announced it was seeking advice on two options for delivering the new hospital project after a report found that current plans could not be delivered within the current appropriated budget of $1.88 billion.
The options considered were to reduce the number of floors and delay the fit-out of some areas until they’re needed at the new site or a staged development at the old site.
Infrastructure minister Chris Bishop said the hospital’s cost could approach $3 billion – more than the original 2017 estimates of $1.2 billion to $1.4 billion.
Labour’s associate health spokesperson Dr Tracey McLellan said Reti was “adding a new review to a project that has already undergone several”, meaning the “costs go up” and the credibility of National to deliver the hospital “goes down”.
The announcement didn’t go down well with many in the community. On Saturday, 35,000 people protested the state of the health system at three separate demonstrations in Dunedin, Westport, and Reefton.
And Dunedin Mayor Jules Radich told RNZ the weekend’s protest was “the start of a programme of activity and it will be ongoing”.
Speaking to Breakfast this morning, Reti acknowledged the “passion that was clearly evident over the weekend” but defended the Government’s decision.
“We understand it was a very difficult announcement to make, but here’s the thing: the cost overruns were so much that we’ve needed to revise the whole project.”
In March, Cabinet authorised a further $290 million to keep the project moving. Reti called the top-up an “extraordinary sum” to top up a hospital “that has already had top-ups on the way”.
“It should indicate very strongly that we will build a new hospital in Dunedin. We just need to figure out now what the best fit is with these cost overruns.”
Reti said the blowout came from “several areas”, including cost inflation, the need to lift the building, air bridges and the logistics of working around a state highway.
He also said the original business case did not consider car parking, pathology, and decommissioning or refurbishment.
“We now need to take all of that into its entirety to protect the projecting going forward,” he said.
Asked if the Government would take on more debt to get the hospital built, Reti said it could become “one of the most expensive hospital builds ever in the Southern Hemisphere” if costs continued to rise.
“If we were to take on more debt, we would have to raise the question of, is this where we would put that new debt?” he said.
“Are there no other health needs in the system that new money would go towards?
“Dunedin’s already contributed to taking on new debt. We’ve just tipped in another $290 million to keep this project moving.”
Reti said the Government needed to “lock down the scope, lock down the cost, no more changes, and build it” so costs could stop going up.
