Blake Lepper: Health NZ Head of Infrastructure Delivery on the review into the current plan for Dunedin Hospital

Health NZ will be weighing up the two options for the new Dunedin Hospital.

An independent review has found the current plan for Dunedin Hospital, is 'probably not achievable' within its current budget of $1.88 billion.

The Government has said it either needs to scale back the project's main building or swap it out in favour of a "staged development" on the old site to keep it within the budget.

Health NZ Head of Infrastructure Delivery Blake Lepper old Mike Hosking costs have been creeping up for some time.

He says after construction began on the main outpatients building, the real costs emerged and they realised they had a problem.

Lepper says this is the problem with greenfields projects, when they were trying to do something a bit different and aspirational.

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Episode Transcript

Speaker 1 (00:00):
It was always coming, wasn't it. And here's your next

(00:01):
problem to need a Dunean hospital was going to get
built for about one point four billion, then it was
one point eight. Now it could be allegedly three billions.
So the downscales on locals are Ropable Health New Zealand
Head of Infrastructure Delivery Blake Leper as well as Blake
very good morning to you, Mike. He well, well, thank you.
It was it was unfair. This has a vibe about it.
This sort of has been coming, hasn't it.

Speaker 2 (00:25):
I mean, certainly this is a project that has been
incredibly challenging, as many big infrastructure projects are. And I
think you know, over the last couple of months people
have to understand as we've been working through this process
that were some very real challenges. So I guess a
bit of sweet day to announce that to the public

(00:46):
and let everyone know where we are and we've been doing.

Speaker 1 (00:49):
How does a build go from ten thousand dollars a
square meter to thirty.

Speaker 2 (00:56):
And I think this is I guess one of the
real challenge with Greenfield's projects and when we were trying
to do something that that was a bit different and
quite aspirational you know, it's certainly as we go through
these business cases, we tend to learn more about the
complexity of achieving what we were trying to achieve, and

(01:17):
those additional costs do add up over time.

Speaker 1 (01:20):
But this is not your fault. You just work for them.
I get this, But can you, I mean, you just don't.
In life, let somebody go it's ten thousand woops, Now
it's not it's thirty without doing something profound about it.
Because something's gone wrong, there hasn't it. I get the
cost of living, I get inflation, all that stuff, but
things don't triple in price.

Speaker 2 (01:42):
And I mean this has been happening over a very
long period of time. We haven't gone from ten thousand
dollars a square meter to thirty thousand dollars a square
meter overnight. And with yesterday's announcement, you know, this is
a project that that costs have been creeping up for
a long time. It has been through a number of
value management exercises as project teams over the years have

(02:05):
tried to make it work. And you know, in this
latest round, you know, late last year we will well
into the construction of the outpatients building, we were king
real price information on what it was costing to build
hospital level facilities in Dunedin, and as we started to
see those costs coming through, we realized we started to

(02:26):
have a problem with what we've been estimating for the
larger and patience building and that's when we started to
flag concerns the government.

Speaker 1 (02:32):
Okay, is there any do you believe the three billion?
Where did he get that from?

Speaker 2 (02:38):
I mean stiddenly if you add up all of the
costs associated with the facility, So you add up the
infrastructure cost, the data and digital which has been funded separately,
you look at the costs that we haven't yet worked at,
how fund associated with remediation and decommissioning of the old facilities,

(03:00):
car parking pathology, that these issues have been talked about
in to Needin for a long time and remain unresolved,
the connections with the university through what was intended to
be an inter professional learning center, and the costs we
were seeing come in. Certainly, you know there was a
world in which this project could be heading towards those numbers.

Speaker 1 (03:21):
Okay, what's to prevent it going even higher? And it
turns out to be a garden shed.

Speaker 2 (03:28):
That's what we're absolutely focused on now ensuring doesn't happen.
Government's given us a very clear direction around what we
need to make the infrastructure component work for and that's
what we are now working to. We have that cap
we now have to find a solution that gets the
best possible facility for Dunedin and the Southern region with

(03:48):
that money we've got available.

Speaker 1 (03:49):
I wish you well with a Blake Leper at Health
New Zealand this morning. For more from the mic Asking Breakfast,
listen live to news talks that'd be from six am weekdays,
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