Premier Jay Weatherill brokers peace deal to end legal dispute over new Royal Adelaide Hospital
A PEACE deal aimed at ending a court dispute over the troubled $2.1 billion new Royal Adelaide Hospital, and ending delays to its opening, could be struck within days.
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A PEACE deal aimed at ending a court dispute over the troubled $2.1 billion new Royal Adelaide Hospital, and ending delays to its opening, could be struck within days.
The Advertiser can reveal Premier Jay Weatherill interrupted his post-Christmas leave to lead a high-powered meeting on Thursday, attended by key players in the stalled project.
The State Government and SA Health Partnership have been at loggerheads for months, with the new RAH’s opening already nine months overdue and accusations the building is not safe to take patients.
Present at last week’s meeting were the consortium in charge of the project, SAHP, as well as its financiers, including some who flew in from overseas.
It is believed the Government, which last year rejected a consortium “cure plan” to finish the build, recently threatened imminent plans to terminate the new RAH build contract completely.
Such a move would have triggered action in the courts as the consortium and builder sought up to $5 billion from taxpayers based on allegations, including that the Government had not acted in good faith and deliberately delayed the project because it was not ready to move in.
Both parties could then be bogged down in the courts for years.
Instead, it is believed the consortium has been offered a settlement deal in which it would pay an unknown sum to the Government as compensation for delays and alleged construction defects.
It has previously been revealed the Government’s was seeking a payment of $600 million, and Crown law has advised the State has broad powers under which it can terminate the contract.
Further mediation between the Government and consortium will continue on Monday and Tuesday.
A resolution to the dispute, and new planned opening date, could be announced later this week.
The new RAH was first due for an April 2016 opening, but the ongoing construction disputes, and the difficulty of moving in winter time, have raised fears it may not open until late 2017. It is believed an opening date in the first half of this year is now probable.
A Government spokesman yesterday said the parties were closing in on a resolution.
“The Government remains hopeful that all outstanding matters relating to the opening of the New Royal Adelaide Hospital can soon be resolved,” the spokesman said. “Importantly, SA taxpayers remain protected under the contract.”
It is understood options canvassed for completing the hospital include the Government bypassing the consortium and retaining the current HYLC joint venture builder on a direct contract. Mr Weatherill remains on leave after returning briefly for the meeting.
Infrastructure Partnerships Australia, an industry group with both commercial and government representatives, has previously warned the Government has created a “sovereign risk” for the state by playing hardball on the contract and may discourage future major investment.
