The health agency is suggesting the Government to consider allowing private companies to build – and potentially run – the country’s public hospitals.
In addition to the new Dunedin Hospital, more than a dozen other large projects are classified as having significant risks.
In Dunedin, the local hospital has been in use since the 1970s, but up and down the country, the story remains the same.
In Northland, emergency doctor Dr Gary Payinda said they are “unbelievably cramped for space in the wards”, the Emergency Department, and the outpatient settings.
“It’s tight.”
Dozens of hospitals across the country are in line to be built or upgraded.
Earlier this year, Health New Zealand told ministers given the scale of investment required, “a range of options for different financing and commercial arrangements may be needed”.
Build and leaseback arrangements, where private companies own the buildings, would help free up funds.
They also floated “Public Private Partnerships”, and said they are widely used overseas.
Health NZ chief infrastructure and investment officer Jeremy Holman said PPPs are “a whole spectrum of how the private sector could work with the private sector from that side of it so there are many different options in there”.
On the suggestion, Minister of Health Shane Reti said: “I won’t reiterate all the advantages and disadvantages. The most obvious is the freeing up of capital that the Crown can then deploy elsewhere.”
And more capital is needed.
Much to the dismay of Dunedin, it was revealed last week their future hospital will be downgraded due to a budget blowout. However, it’s not the only project with issues.
As of March, 34 projects were on track, 22 were classified as having some risks, and 17 were marked as having significant risks.
Holman said this means they have to go to the projects which are on track, and try to bring costs down.
Labour Party associate health spokesperson Tracey McLellan said there are a “scary number of projects that are at risk”.
“It’s all about choices. The Government needs to make the choice to invest properly in health infrastructure.”
Many details of the projects with significant risks have been redacted. But cost and scope are concerns for the Whangārei Hospital redevelopment, which has led to concern it too could be downgraded.
Payinda suggested there is an ironic element to the financial situation the Government is in.
“There wasn’t any hardship quickly finding the money for tax cuts and benefits to landlords, but now there is a great deal of trouble affording healthcare infrastructure,” he said.
“I mean, that’s the irony.”