The Government has approved an additional $110 million for the New Dunedin Hospital to manage market cost escalation and complete the project.

The additional funding means the project will continue with some changes which incorporate design flexibility to increase capacity in the future.

“Due to an increase in costs identified earlier this year, it was necessary to consider whether there was scope to modify the design of the New Dunedin Hospital without impacting on the core objectives of the build,” said Te Whatu Ora Chief of Infrastructure and Investment Jeremy Holman.

“An increase of $200 million was identified as part of a review of the cost of all health infrastructure projects, and therefore we have undertaken a thorough value management exercise.

“The New Dunedin Hospital is currently the largest infrastructure build in New Zealand, which means any increase in costs will be felt exponentially across the build. When developing a publicly funded building project of this size, it is important that we are fiscally responsible while still delivering a fit-for purpose health facility.” 

“Dunedin hospital clinicians and service designers were consulted on proposed amendments to the plans and were a big part of us reaching the updated design that meant we could save $90 million of the projected $200 million escalation. 

“We did this by focusing on how we could reduce any impact on key clinical services while considering design efficiencies,” said Mr Holman.

The design changes to the Inpatient building provide the flexibility to increase capacity in the future:

  • There will be 398 beds on opening – with space set aside for 12 more beds
  • 26 Operating theatres – with space to add another 2 as required
  • 2 MRI – with space for 1 additional MRI in the future
  • PET CT scanner to be installed later, space available
  • The Pavilion Building and one link bridge between Inpatients and Outpatients will not go ahead.  

Dean Fraser, Ngāi Tahu’s Dunedin Hospital Build Executive Steering Group member, said while it was disappointing the original design wouldn’t be going ahead, Ngāi Tahu were looking forward to ensuring the aspirations of manawhenua would be evident in the updated design, landscaping and delivering on the original intent of Ngāi Tahu. 

Enabling work is commencing in January 2023 for the Inpatient building with main construction expected to commence in the first quarter of 2024.Construction completion is expected in 2029.

There is no change to design for the 5 storey Outpatient building which is on track to be delivered in late 2025.

The additional $110 million means momentum on the project is maintained and substantial delays to the NDH are avoided.

“The updated design means the Southern region will have a hospital that is more efficient within the floor space, purpose designed to suit modern ways of working, and will continue to provide services for a growing and ageing population. 

“We all remain committed to ensuring Dunedin will receive a fit-for-purpose, state-of-the-art facility. Better care for patients with safe, modern facilities remains the priority.

“We have been working closely with service designers, local Dunedin clinicians, and Ngāi Tahu to achieve the best outcome possible for the new hospital and the services it will provide. I would like to thank them all for their commitment to this project,” said Mr Holman.