Health Minister Michael Ferguson reveals Royal Hobart Hospital revamp running six months late

REDEVELOPMENT of the Royal Hobart Hospital is six months behind schedule, with the company in charge of the project facing a $5.5 million penalty for the overrun.

The Royal Hobart Hospital redevelopment is six months behind schedule. Picture: MAT FARRELL

REDEVELOPMENT of the Royal Hobart Hospital is six months behind schedule, with the company in charge of the project facing a $5.5 million penalty for the overrun.

Health Minister Michael Ferguson has confirmed the $689 million project is now not expected to be completed until mid-2019, following months of speculation.

This follows a raft of issues at the hospital, including faulty modules and asbestos scares.

After constant assurances that the project was on time, Mr Ferguson has delivered a Ministerial Statement in Parliament outlining the issues which he said have led to the delay.

“The Royal Hobart Hospital Redevelopment Project has provided a report to the Government, which advises that the project will be completed approximately mid-2019, unless the managing contractor is able to successfully program works to make up time and thereby reduce delays,” Mr Ferguson said.

Health Minister Michael Ferguson. Picture: NIKKI DAVIS-JONES

Pressure is now on the managing contractors, John Holland Fairbrother Joint Venture, to get the project delivered before the new time frame, or suffer significant penalties. Mr Ferguson said the managing contractor would face penalties of $17,000 per day if the project was not completed by the “practical completion date” of late December 2018.

Penalties will increase to $35,000 per day after a further 30 days. This means the managing contractor could be forced to pay the State Government about $5.5 million if the project blows out to mid-2019 – which is now expected.

“Viable options to mitigate delays will be assessed by the managing contractor and the RHH Redevelopment, but will be undertaken only if it delivers a facility that is safe and fit for purpose,” Mr Ferguson said.

A spokeswoman for John Holland-Fairbrother Joint Venture said the managing contractor was “endeavouring to minimise the delays and continuing to work in partnership with the Tasmanian Government to deliver the project as efficiently as possible”.

“Accordingly, we won’t be speculating on any potential penalties at this stage,” the spokeswoman said.

One month ago, Mr Ferguson said the date for the completion of the RHH redevelopment remained the end of 2018, despite repeated calls from the Opposition to acknowledge the project was behind schedule.

Opposition Health Spokeswoman Rebecca White said Mr Ferguson had mislead Tasmanians when it was clear there was no way the deadline would be met.

“He has accused anyone who has questioned progress on this critical project as scaremongering when in reality he would have known for months the project was behind schedule,” she said.

Mr Ferguson said legal constraints had not made it possible to comment on possible project overruns until now.

Australian Medical Association Tasmanian president Stuart Day said the association was not concerned about the delay if the future outcome was a strong one.

“Rebuilding a hospital while trying to still run a hospital service is a complex arrangement so delays are part of that process,” he said.

“It makes life difficult [for staff], there’s no doubt about that, but as long as things are progressing, which they are, people understand that it’s to get a better outcome.”

Denison Independent Andrew Wilkie, who secured funding for the project in 2010, said the “slippage in completion date” was disappointing.

“The current hospital is in very poor shape and the community will enjoy much improved health care when the rebuild is complete,” he said.

“I am satisfied, however, that this delay is despite the State Government’s best efforts to keep the project on track.”

Master Builders Tasmania executive directorMichael Kerschbaum said the delay was “entirely expected”.

From an industry perspective, it could be actually be a positive, because it would occur after the bulk of work was done on other significant Hobart projects, such as the Parliament Square redevelopment and the University of Tasmania’s student accommodation project, he said.

“In the next six months, the back will be broken on those projects and therefore the early work on the hospital won’t have that same overlap of the same trades,” he said. “The construction work program [for the RHH] was a very ambitious one to begin with.”