Royal Hobart Hospital builders in talks on deadline as penalty payments loom

The builders of the overdue Royal Hobart Hospital redevelopment are locked in negotiations with the State Government over millions of dollars in penalty payments.

Health Minister Michael Ferguson, right, on a tour of the Royal Hobart Hospital redevelopment with staff specialist anaesthetist Sandy Zalstein. Picture: RICHARD JUPE

THE builders of the overdue Royal Hobart Hospital redevelopment are locked in negotiations with the State Government over millions of dollars in penalty payments.

Under the contract between the Government and managing contractor John Holland Fairbrother Joint Venture, the new K Block building was due for practical completion by late December 2018.

The project is now due to be finished in mid-2019 after delays attributed to a raft of issues including faulty modules and asbestos scares.

RHH REVAMP RUNNING SIX MONTHS LATE

The Joint Venture faces more than $5.5 million in penalties over the next six months.

Under the redevelopment contract, there is a provision for damages 30 days after the date for practical completion. The damages are $17,000 a day. After 60 days after the date for practical completion, damages of $35,000 a day apply.

However, Royal Hobart Hospital redevelopment project director Ben Moloney has confirmed the builders are negotiating with the Government over the project deadline.

“The contracted date for practical completion of K Block is the subject of claims for extensions of time from the builder in accordance with the contract, but remains prior to August 2019 irrespective of the final outcome of these claims,” Mr Moloney said.

A spokeswoman for the John Holland Fairbrother Joint Venture would not be drawn on the potential damages bill.

“The project remains on track for on-time practical completion in 2019,” the spokeswoman said.

The Government has not provided an up-to-date figure on the cost of asbestos removal from existing parts of the hospital. Greater than anticipated asbestos removals were a major reason for the six-month project delay announced in 2016.

The Government is responsible for the cost of asbestos removal, with around 20 per cent of a $51 million refurbishment budget allocated in 2014 to go towards removing asbestos.

Mr Moloney said the redevelopment did not maintain a separate register of asbestos removal costs.

“However, the project made an appropriate contingency funding allowance for latent conditions and the project’s uncommitted contingency funds are considered sufficient to complete the project within budget,” he said.