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The original was posted on /r/newzealand by /u/BeKindm8te on 2024-10-04 20:17:32+00:00.

Edit: As included in David Slack’s “More Than a Fielding” on Substack). Note: not my words, they’re Pete Hodgson’s; just posting here as I think it’s really insightful.

The problem, and the solution:

My name is Pete Hodgson, and I chaired or served on the governance group of the new hospital for 6 years until last Xmas.

I have also chaired the Southern district health board, was the health minister back when Richard chaired the DHB, was a local MP for 20 years, and I want to talk about money.

Two days ago, Ministers came to town to downgrade the new hospital and to release Robert Rust’s report.

I know Robert Rust and I have read his report. He is an engineer who understands finance. He has spent much of his life building health infrastructure in New South Wales.

He is a polite, careful man and he knows his stuff. He says that the hospital ‘probably’ cannot be completed within the current budget of $1.88 B.

That is a problem to which I will return.

Two days ago, when Ministers came to town to downgrade the new hospital and release the Rust report, they said they wanted to be open and transparent.

They were anything but. They said that the cost of the new hospital was approaching $3 billion. The Rust report didn’t say that because it isn’t true.

Richard has already read you Rust’s first recommendation which is that ‘the scope needs to be fixed as a matter of urgency’. That scope was decided years ago, when Bill English was Prime Minister.

Rust is politely saying that someone has bolted a car park and a community pathology cost onto the hospital when they were never part of the project.

He is saying that someone has decided to throw $300m at refurbishing an abandoned building when the no-one knows to whom which bits might be sold or leased for what purpose. He is politely saying that the governance needs to be fixed.

But Ministers have instead used that criticism to pump the cost towards $3 billion. Did they really think we wouldn’t notice? I am calling them out for their deceit.

Two days ago, when Ministers came to town to release the Rust report and to be open and honest, they said the project had been trouble from the start.

They said that it was built in the centre of town, prone to flooding, on contaminated soil, with uncertainty over piling.

But the Rust report says nothing of that. Ministers just made it up.

The reason that Prime Minister Jacinda Ardern asked that it be in the centre of town, where it has been for 100 years, is that Dunedin trains health science students, for all of New Zealand, in their thousands. I would hope the Minister of Health would be enthusiastic about that.

The chocolate factory was demolished, the rubble used to build up the ground level, all necessary soil decontaminated, all piles driven for both buildings, all for less than 3% of total cost. How wrong could Ministers be.

Here is my advice to the Government about yet another cost overrun.

Don’t bother to review the building capacity again. It wastes time and it costs money. There are no vanities or bells and whistles to be found.

Remember Richard’s comment that the hospital was designed from the outset on ambitious assumptions of high efficiency and significant investment in primary care.

Lopping even one storey from the tower block will mean the new hospital would have fewer beds than the current one.

Instead satisfy yourself that you have created an acceptably strong competitive environment, and an acceptably innovative approach to modularising or other tricks of the trade, and an acceptably competent governance.

Then build the bloody thing.

Don’t bother with the blackmail that other hospitals such as Whangarei need the cash. I know the Whangarei hospital. My father spent his last days there a few years ago and it is in dire need of attention.

But Northlanders want half a hospital as much as Southerners do.

Instead look at the Infrastructure Commission’s report of a few years ago which said health infrastructure spending needed to be quadrupled – for thirty years.

Then note how the previous government did put big chunks of money into each of their 6 budgets but how this year’s budget had next to nothing. Therein lies the problem, and the solution.