Auckland’s Manukau Health Park project is now facing a budget blowout as it battles the impact of Covid-19 and global supply chain shortages, according to Te Whatu Ora.
But officials are remaining tight-lipped on the development’s new projected price tag.
The Manukau Health Park was originally expected to cost $236m, with the Government providing $216.4m in funding and Counties Manukau Health covering the balance. But in a statement Te Whatu Ora Counties Manukau spokesperson said it was now revising its numbers.
“We are currently working through final costs, however due to a range of market conditions impacting the construction sector, we expect the final cost to be higher than the originally projected budget.”
They would not provide details on the project’s new price tag.
“We are currently working through a ‘live’ procurement process and due to this, we can’t comment any further on final costs. At this point in time, we can state that the final cost projection is expected to be higher due to market conditions impacting the construction sector and wider economy.”
But the spokesperson said civil engineering and construction work remained on schedule to start later this year and the health park redevelopment was now on track to be completed in 2025. And despite the setbacks, it remained a priority project.
The new facilities are expected to include an expanded renal dialysis service, four new operating theatres, a new radiology hub and an integrated breast care service. The site will also be future-proofed for further expansion.
Counties Manukau Health said in May last year that the redevelopment was needed to address the area’s growth, with the number of appointments handled by the facility forecast to grow by 25 per cent over the next decade.
It said it had approved preliminary designs for the project and work was expected to start in late 2021.
But the first stage of the infrastructure works at the Great South Rd site adjoining the Manukau Super Clinic didn’t start until February this year.
Health Minister Andrew Little said all infrastructure projects were currently facing major cost increases as a result of supply-chain issues, the war in Ukraine and global inflation pressures.
But he said it was important that people in the public health system kept an eye on their budgets.
“In the health sector, my expectation is that all project leaders will look at appropriate steps to mitigate the risk of cost escalation.”
Association of Salaried Medical Specialists (ASMS) executive director Sarah Dalton said hearing the news of a cost blowout on a major project like the Manukau Health Park wasn’t a surprise.
But Dalton said now that the DHBs had been disestablished and replaced by Te Whatu Ora, it would make sense to review all health infrastructure projects nationwide.
“There are a number of projects that were under development before the health reforms came into effect. So it would make sense to now carry out a review of our infrastructure nationally,” she said. “And some projects might now be put on hold, or paused.”
