15 Apr 2021

Business case for new Dunedin hospital to go before Cabinet

10:20 am on 15 April 2021

The detailed business case for the $1.4 billion Dunedin Hospital rebuild will finally reach Cabinet in the coming weeks after months of delays.

The old Cadbury's site

Photo: RNZ / Nate McKinnon

In the lead-up to the 2017 election Labour leader Jacinda Ardern and then health spokesperson David Clark promised to begin construction of a new Dunedin Hospital in its first term, and have it completed ahead of National's deadline of 2027.

After taking the reins of power, they reiterated that promise.

In an effort to save face, Clark claimed mission accomplished in February last year as he pulled a weed from the former Cadbury factory site - where the new inpatient building will sit - ahead of demolition.

But current Health Minister Andrew Little conceded to RNZ the government did not deliver on its promise to the south.

"Well it's self-evident - construction isn't underway. We've secured the land. We've started the demolition process. We are completing the design. You have to bear in mind too the cost has increased somewhat since the original plan and that often happens ... so adjustments have been made. The site that is being built on is going to require some work that at the time wasn't foreseen in terms of foundations. So those things do happen.

"But we have a detailed business case that has been to the executive steering group, it will come to Cabinet in the next few weeks for final sign-off, a lead contractor is being secured at the moment. So there's a lot going on, I am satisfied that there's good momentum behind the project now," Little said.

The main hospital building would also not be complete until at least 2028 - beyond National's promised deadline.

In December 2018, the government said parts of the day surgery and outpatients building would be operational by November 2023. This has now been shifted until at least early 2025.

Andrew Little

Photo: RNZ / Dom Thomas

When Little took over the health minister's role late last year, he shook up the governance of the project by dissolving the Southern Partnership Group and appointing an executive steering group.

Little said, despite the delays, he was satisfied there was now momentum behind the project.

"When I started the role as health minister it was always expected that the detailed business case would go to the executive steering group in February ... so I'm satisfied with where things are at and the fact that the preliminary work is underway."

The layout and budget in the detailed business case going to the government was much the same as what was signalled when a masterplan was released early in 2019.

Southern DHB chairperson Pete Hodgson who previously led the Southern Partnership Group steering the rebuild, said part of the delay had been the business case working its way through the cogs of bureaucracy.

"There has been no significant departure from that initial bit of master site planning work that was done some time ago. Having said that, multiple forces wanted to test those findings and to check out alternatives and to make sure we had it right, and a great deal of time was taken up in that analysis and debate.

"Having gone through that analysis and debate - actually, nothing changed."

Dunedin-based National list MP Michael Woodhouse said the public was only marginally closer to a new hospital since his party left government.

"It was always going to take some time and I said quite publicly that the Minister of Health [then David Clark] has to be careful at the promises he was making to the people of the south that I knew couldn't be delivered.

"But even I didn't think it would take them this long to approve the detailed business case. Something's going on here and the public in the south needs to know what it is."

Association of Salaried Medical Specialists executive director Sarah Dalton said the current hospital was no longer fit-for-purpose, and while it was not the only issue for clinicians, it was causing further strain.

"It's a cumulative factor of sub-standard working facilities, very heavy workloads, significant gaps in staffing and that sense that at times their voices aren't being heard."

In a recent survey almost two-thirds of senior doctors and dentists in Southern DHB reported feeling burnt out.

Dalton says the issues with the new Christchurch Hospital - which was over budget, late and faced capacity issues - underscored the importance of getting Dunedin Hospital right.

Little said there was no firm date to begin construction of Dunedin Hospital but the detailed business case would be with cabinet soon, and the government was committed to opening the main building in 2028.

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