Coleman signs $300M contract with Cimic for Christchurch hospital building

Thursday 10th March 2016

Health Minister Jonathan Coleman has signed a $300 million contract for Christchurch Hospital's new acute services building with Cimic Group's CPB Contractors unit, a project the Auditor-General says was bogged down by a strained relationship between the Ministry of Health and the district health board.

The government will spend a total of $445 million on the project, with another $215 million for the redevelopment of Burwood Hospital, and $72 million for a new outpatients facility.

The acute services building is due to be completed in March 2018, and Coleman said it would allow Canterbury District Health Board to perform 6,000 more surgeries a year.

The central hospital project is being run under a new model, with the ministry responsible for managing the project, and a new group, the Hospital Redevelopment Partnership Group, providing governance. Typically, a district health board is responsible for its own major projects, with the ministry monitoring.

Yesterday, senior auditors from the Office of the Auditor-General told parliament's finance and expenditure committee that not enough thought had been given as to how the DHB would be involved in the project, nor how the governance structure would operate in practice.

Senior performance auditor Kate Williams said it was "no secret" that the relationship between the DHB and ministry had been difficult and strained, with uncertainty about roles and responsibilities within the project, and time had had to be taken to resolve those issues rather than the project.

Coleman did not refer to the dynamic between his ministry and the DHB, but said Canterbury’s health workforce had "demonstrated incredible resilience and determination" over recent years, and staff had worked significant extra hours on the redevelopment.

ASX-listed Cimic was formerly known as Leighton Holdings. The stock today gained 0.8 percent to A$34.47, having climbed about 42 percent so far this year.

BusinessDesk.co.nz

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