Govt throws another $18 million at Chch hospital to cover rising building costs

Wednesday 26th April 2017

Health Minister Jonathan Coleman has signed off on spending an extra $18 million for the Christchurch hospital acute services building, which is dealing with a nationwide issue of rising construction costs.

The increased funding lifts will pay for a fit-out of two 32-bed wards and a bridge-link on the hospital campus, taking the total project cost to $463 million, Coleman said in a statement. Once it's finished, the acute services building will house 12 operating theatres and procedure rooms, acute medical assessment, an expanded intensive care unit and emergency department, and a radiology department.

"The government approved the additional $18 million in the past week to cover the shortfall created by cost escalation pressures in the Canterbury construction market," Coleman said. "The acute services building is already the largest government project in the Canterbury rebuild."

The project has already faced problems before the today's bigger bill, getting a mixed report from the Office of the Auditor-General last year over the lack of thought put in as to how the Canterbury District Health Board would be involved, unclear governance arrangements, and noting the strained relationship between the DHB and ministry. The Auditor-General's audit found construction costs were recognised as the project's biggest risk, which reduced once a preferred contractor was selected.

ASX-listed Cimic Group's subsidiary CPB Contractors went on to win the $300 million contract in March last year with a view to completing the build by March 2018. In November, the Treasury's major projects report found the acute services building was on schedule but facing cost pressures and that the ministry was working through options to ease those issues by early 2017.

Coleman today said the acute services building was expected to be completed in 2018, and is part of the near-$1 billion redevelopment of Christchurch's hospital facilities.

(BusinessDesk)

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