Review slams plans, budgets for flawed Queensland hospital projects

A long-awaited review of Queensland’s public hospital capacity expansion program has left doubts over a series of projects found to be compromised by design flaws and budget blowouts.

The review, headed by infrastructure consultant Sam Sangster, examined the expansion of 11 hospitals, the delivery of three more, plus the construction of the Queensland Cancer Centre, all initiated by the former Labor government.

It found projects were planned in just six weeks in 2022, and governed in a “futile” manner that put timelines above all other considerations, leading to massive cost increases and the belated discovery of unforeseen problems.

The expansion of Ipswich Hospital was among the projects considered in the Sangster review.Credit: Matt Dennien

Cabinet considered the review on Tuesday, and debated what to do with a program now estimated to cost $17 billion to deliver – due largely to failings under Labor.

An artist’s impression of the new Queensland Cancer Centre.Credit: Queensland Government

“The chosen procurement strategy was deeply flawed and ignored market realities, despite a range of internal and external advice being provided, leading to significant project cost blowouts,” the review found.

“The initial project budgets were set inexplicably in isolation of the realities of market conditions – prevailing market conditions were well known at the time of the establishment of the project budgets.”

The budget for the new Queensland Cancer Centre, to be built at Herston, has blown out to $1.8 billion – with a $620 million funding gap before substantive work even starts.

The review recommended the project, which enjoys bipartisan support, be sent back to the drawing board for a business case to be completed. At the same time, the government should analyse demand for cancer services across Queensland “to ensure cancer services are planned to be delivered closer to where the demand exists and where the requisite workforce can be sourced”.

The Redcliffe Hospital expansion budget has also blown out, leaving a funding gap of more than $1 billion. The project has been plagued by design challenges, including “resolving the future status of a substantial scar tree with Indigenous significance that sits within the planned building’s envelope” – an impasse that has cost an estimated $54,000 in daily costs since September 2024.

“The present project is undeliverable in its current form – without resolution of the scar tree issue, the resolution of clinical scope matters, the technical challenges with expanding the car park and the risk allocations driving subcontractor pricing, the project will continue to experience delays and unmitigable increased forecast costs,” the review found.

The scar tree at the Redcliffe Hospital expansion site.

The review recommended work be halted and the project team “swiftly replan the delivery of the project, rotating the building 90 degrees or otherwise replanned to avoid the scar tree” and address health service concerns relating to the emergency department.

The QEII Hospital project has a $165 million funding gap, and a plan that failed to incorporate the need to upgrade the hospital’s low-voltage power system to high-voltage. That change is uncosted, unfunded and subject to further negotiation with Energex.

The Prince Charles Hospital project is running $428 million over budget, with the review also warning of a “disproportionally high number of scope risks and unresolved scope decisions all of which will add to the present cost challenge for this project”.

The review recommended the stage one contract continue to conclusion, with further review and consideration before any decision is made to proceed with stage two.

The budget for the Princess Alexandra Hospital expansion has more than doubled, to $761 million, with $411 million of that unfunded. The review recommended work continue under a tighter rein.

The Logan Hospital project has a $345 million funding gap, and the Ipswich Hospital project a $215 million funding gap, with the review recommending work on both projects also continue.

Other projects were found to have similar problems and a range of possible solutions.

Premier David Crisafulli will on Wednesday announce the program will be rescoped to deliver 2600 beds across the state – an increase of 400 on Labor’s plan – but with delivery dates varying from 2028 onwards.

The government will persevere with the Queensland Cancer Centre project and start to factor in the increased costs in its June budget.

Crisafulli would not be drawn on Cabinet deliberations on Tuesday, saying only that Labor’s expansion plan was “undeliverable” and hospitals could not have been built without a change in government.

The review found that even hospital car park projects were troubled, with contracts awarded at “grossly inflated prices” leading to the cost of each space ranging from $80,000 to $250,000 compared to benchmark costs of $40,000-$65,000. With changes, $500 million could be saved.

The LNP government has repeatedly warned of blowouts in the state budget, including the health portfolio, which the Labor opposition claimed was a political strategy to prepare Queenslanders for cuts.

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.