Yesterday I briefed Cabinet on a number of serious issues relating to the Royal Hobart Hospital Redevelopment Project.
I outlined matters related to significant delays, management issues, patient risk and potentially significant budget blowouts.

The Government has determined to rescue the Royal Hobart Hospital project from the crisis it is now facing.

Cabinet has asked me for further specific advice which I will present at our next meeting.

While I cannot release all the information which I presented to yesterday’s Cabinet meeting, I can give Tasmanians an overview of some of the scandalous findings relating to the project as it stands.

These findings have made it impossible for any responsible Government to simply proceed with the project without taking further advice.

The blame for the appalling mismanagement of the RHH project rests squarely at the feet of the former Labor Green Government and its then Health Minister Michelle O’Byrne and former Premier Lara Giddings.

It’s a right royal mess. In summary the information I provided to Cabinet revealed the following facts:

  • There is conflicting advice on the feasibility and patient safety of decanting “B” Block.
  • Despite the RHH redevelopment project only having planning approval for 10 floors, planning design work was based on 11 floors. The proposed 11 floor design was not consistent with the Development Application approved by the Hobart City Council. $813,000 had to be spent to correct this.
  • There are significant concerns about the provision of independent advice and a governance structure which had poor capacity for checks and balances.
  • Construction methodology -The Executive Steering Committee is concerned about the costs and risks of decanting and the subsequent exposure to the Crown to risks, which were not fully understood or ascertainable at the time of changing construction methodology.
  • Significant concerns regarding the management of the RHH Redevelopment Project have been raised, including the following risks:
    • Adverse budget impact due to significant capital cost overruns and unfunded increased operating costs;
    • Major delays in completing the proposed works; and
    • Service disruption.
  • Financial risk: It is unlikely the current proposed construction could be completed within the available capital budget, notwithstanding $43.6m for contingencies. The project is currently $23.5m over budget, taking up more than half of the contingencies prior to building even commencing.
  • Design Management: The project has relied upon external project planning and management expertise but the multiple consultants have not been well managed and their input to the project has not been properly coordinated leading to multiple design changes and rework of aspects of design. Duplicative costs and costs associated with corrective action are in the order of $7 million and this is a conservative estimate.
  • Project management & Governance: Governance and management of the project to date has been inappropriate, inadequate and constantly revised. There is a lack of suitably skilled personnel in key positions, with almost half of the positions on the team vacant.
  • Decanting: Despite months of work within DHHS, it is still not clear that the proposed approach to decanting and refurbishment is plausible, affordable and /or acceptable to the clinical community.
  • The latest fit-out budget may be operationally unachievable.

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