Te Whatu Ora is defending a blow-out in the budget of the Manukau Health Park project, which is now expected to cost $316m, and says the 38% increase has been driven by rising costs in the construction industry.
The project was originally expected to come in at $229m when it was first announced two years ago, with the Government committing $216.4m in funding and Counties Manukau Health covering the balance.
But a Te Whatu Ora Counties Manukau spokesperson said new figures released this week show it is now expected to cost $316m.
“These increases are in line with market conditions and are largely owing to those which have impacted the construction sector,” the spokesperson said.
According to Te Whatu Ora Counties Manukau the Government has agreed to provide an additional $85m in funding to cover the increased cost.
Construction is now expected to start at the Great South Rd site early next year and be completed in 2025.
In August Te Whatu Ora Counties Manukau confirmed it was revising its budget numbers for the project. But it said it couldn’t provide details on the new price tag as it had started the tendering process for the works.
“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.”
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.
The spokesperson said the redevelopment was needed to address the area’s growth, with the number of appointments handled by the facility forecast to grow by 25% over the next decade.
“The increase in capacity will enable almost 150,000 additional appointments each year when fully utilised, and more than 3600 additional surgeries to be performed on site from 2025.”
Association of Salaried Medical Specialists (ASMS) executive director Sarah Dalton described the 38% increase in the cost of the Manukau Health Park project as “chunky”.
But she said there’s no doubt the new facility was needed in Counties Manukau.
“In terms of healthcare there’s no question south Auckland is a very high priority area. And a lot of the infrastructure in our hospitals and in the health system is looking very tired.”
But Dalton said with rising costs in construction it’s more important than ever that the Government makes sure it’s getting the best value for money for every health dollar spent.
“They want to ensure the right projects are being funded,” she said.
In May last year Counties Manukau Health 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 didn’t start until February this year.
