Bishop said earlier this year that Cabinet commissioned an investigation by Robert Rust, former chief executive of Health Infrastructure New South Wales, into the project.
Today, the Government released that report. It concluded the project is “not achievable within the budget” and said that business cases needed to be done for “associated programme workstreams”. Bishop said that proper business cases had not been done on hundreds of millions of dollars of the project.
The report recommended refreshing the Project Steering Group that governs the hospital rebuild, suggesting the Government look for appropriate expertise in both construction and future operation of the hospital”.
“There should be an independent Chair and an appropriate Senior Responsible Owner in Health New Zealand,” he said.
Bishop warned funding the blowout could come at the expense of other regions.
“This cost simply cannot be justified when hospitals around New Zealand are crying out for maintenance, upgrades and new facilities. Dr Reti and I are concerned that badly needed infrastructure upgrades to Whangārei, Nelson, Hawke’s Bay, Palmerston North and Tauranga hospitals may be put at risk if New Dunedin continues to go so far over budget,” Bishop said.
Te Whatu Ora head of infrastructure delivery Blake Lepper said the outpatient building remained on track, but could give no clarity on what might be trimmed to ensure the project stayed within budget.
”Ministers have given us a clear budget to work within, and we’re currently exploring all options.”He was unable to specify any features or services that would be cut.
The local MP, Labour’s Rachael Brooking, said it was “outrageous to pit Dunedin against other parts of the country when it is this Government making choices to give more tax breaks to landlords [instead of paying for the hospital], that is their choice”.
She noted that Labour had begun paring back the project in Government by planning to build parts of the hospital that would not enter service on day one – decisions that were attacked by National at the time.
Labour’s Health Infrastructure Spokesperson Tracey McLellan said the new plan was a “sterling disappointment”.
“The project, which Labour began and funded, has been downgraded despite silver-tongued promises National made to get into Government.
“Labour’s fully costed project had the budget allocated to pay for it, was bigger, and had additional capacity for mental health and MRI facilities. National are potentially content with simply giving the old building a makeover,” McLellan said.
Bishop defended the governments decision-making process, saying that the independent review was commissioned following the request for a $290 million budget upgrade earlier this year. He said that the the Infrastructure Commission conducted the review and that the latest cost estimates that came in from the contractor were several hundred million dollars over the original amount.
”So that has prompted us to do further thinking about it, and that’s why we’re here today laying out for the public, and for the people of Dunedin and the wider region, the next steps and being as upfront as transparent as possible,” he said.
The review was commissioned in the first quarter of this year and delivered at the end of May, Bishop said. When he was last in Dunedin, Bishop made assurances the hospital would be built as promised. He said that during that time, government were still waiting for collective advice from ministers on the review and its recommendations.
Bishop reiterated that “various commitments were made based on flawed and faulty information.”
”We were assured by the previous government that the project was on track, but it wasn’t. It hasn’t been for some time.“”No business case has been done for about $400 million worth of work that’s required for parking, pathology, and other facilities,” he said.
”The people of Dunedin are getting a new hospital - a significant $1.88 billion investment,” he said.
“While $3 billion is off the table, $1.88 billion is still a huge investment. It will bring excellent facilities, doctors, nurses, and clinical staff to this region.”
”We can’t justify spending up to $3 billion, as it would come at the expense of other regional hospitals in Nelson, Whangārei, Napier, and others.”Reti said the governments commitment during the campaign was based on " best evidence we had at the time, which we now know was significantly flawed.“”The commitment we made was to add $30 million for refits in six years. Now, we’ve committed $300 million,” he said.
Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.
