New Dunedin Hospital
Preferred bidder announced
Greenfield (construction) or brownfield (government asset divestment) projects needed or likely to occur within the next five years, but is not formally proposed by a state, territory or major local government.
The project or divestment is supported by a state, territory or major local government, is subject to studies or other processes (such as pre-feasibility or scoping studies or business case development), and is likely to proceed to formal announcement.
The project has a firm commitment and timeline from a state, territory or major local government, but has not yet entered the market.
The project or transaction is under procurement (such as a call for Expressions of Interest, requests for tender, or another offer to the market).
Preferred bidder announced
A preferred bidder has been selected and is in exclusive negotiations.
Projects that have progressed to contractual close remain on ANZIP for 12 months.
ANZIP is focused only on major infrastructure activity, above the following thresholds:
Construction projects: > AUD$300m
Investable greenfield & brownfield: > AUD$100m
All greenfield and brownfield projects and divestments: > NZD $100 million
Dunedin Hospital is a 388-bed tertiary hospital servicing the lower part of the South Island of New Zealand, operated by Southern District Health Board (Southern DHB). In 2015, the NZ Ministry of Health appointed the Southern Partnership Group to lead the redevelopment of the hospital.
The New Dunedin Hospital will see construction of New Zealand’s largest ever hospital, comprising two main structures, the Acute Services Building and the Ambulatory Services Centre. Once completed the new hospital will provide capacity for 396 overnight beds and 67-day bed equivalents.
The Indicative construction timeline indicates the project will be delivered in three sections. However, this is subject to market engagement and the NZ Government’s consideration of the detailed business case, which is expected to be in early-2020.
Enabling works are expected to start in early-2020. The Ambulatory Services Building will commence construction in 2020, with the Day Surgery component to be completed by late-2023 and the full building by late-2024. The larger Acute Services Building is scheduled to begin construction in 2022 and be operational by 2028.
In June 2019, the NZ Ministry of Health announced a period of market engagement with interested suppliers and market participants in July to support development of the detailed business case and procurement for the project.
Industry briefings were held on 9 and 12 July in Dunedin and Sydney respectively, providing information about the project, the NZ infrastructure pipeline and indicative timelines for the project. This was followed by a request for written feedback and one-on-one engagement meetings with selected participants.
In February 2019, the NZ Ministry of Health announced that Underground Overground Archaeology will provide heritage advice for the buildings that are to be demolished. Scope Group has also been contracted for the demolition work and KPMG will be providing independent quality assurances for the project. Key design and consulting firms contracted as of May 2019 include:
- Resource Coordination Partnership - Design Manager and Project Manager roles
- Holmes Consulting - Structural Engineering
- Beca - Building Services Engineering and Fire Engineer and Protection
- Stantec - Hydrology/Flood Assessment and Traffic Engineering
- Boff Miskell - Town Planning, and
- WSP Opus - Building survey and demolition.
The 2019 NZ Budget set aside funding for the project in a contingency in anticipation of the project's business case being completed. The Budget allocated $10.6 million to FY2019-20, and notes that the remaining funding will be allocated over the 10-year life of the project. Once the business case is complete, the Government will consider the options for the redevelopment.
The project is the result of a number of buildings on the current hospital campus nearing the end of their economic life, including the current Clinical Services Building built in 1960, which has increased the risk of operational failure.
In June 2017, the Southern Partnerships Group released the Indicative Business Case (IBC), which provided two preferred options for the redevelopment:
- a new hospital to be built on a greenfield site. The IBC did not propose a potential site, but it is expected the new hospital could be commissioned in February 2027, and
- a new hospital on the Wakari site, which is already owned by Southern DHB. This option will require demolition of existing buildings and decanting services on the site, which will add to the cost of the project and delay the delivery timeline.
With both options, the estimated cost of the project is between NZ$1.2 billion and NZ$1.4 billion.
The 2018-19 NZ Budget set aside funding in contingency for the design and planning of the project.
In August 2017, the NZ Government approved the IBC. In May 2018, the NZ Government announced that the new hospital would be built on the old Cadbury Chocolate Factory site and parts of surrounding blocks. The Government bought the required land in June 2018.
The Southern Partnerships Group completed phase one of the detailed business case, which was approved in August 2018. The second phase of the detailed business case will be informed by the master site planning and was expected to be completed by March 2019. The detailed business case is to provide information on detailed design, financing, and a proposed timeline for major construction works.
The previous NZ Government had planned to assess all options for procurement of the new hospital, including a Public Private Partnership. However, with the change in government in October 2017, the incoming Government announced that the project will not be delivered through a PPP.
In December 2018, the NZ Government announced a significant change to the construction approach. It will now be built in two stages, with the outpatient and day surgery building fast tracked to be finished more than three years earlier than anticipated and the larger inpatient building due to be finished five or six years after that. This change in construction approach acknowledges that the current Dunedin Hospital would not be able to deliver the required services over the original construction period. Previously, the new hospital would have been constructed in one go, to be open by mid-2026. However, the new plan is to open the smaller of the two buildings, the day surgery and outpatient building, in two stages; November 2023 and November 2024.
The new hospital is expected to be slightly bigger than the current one, with 454 beds. At the end of 2018 174 Castle Street was purchased, and since then the property occupied by MIDAS in the Wilson car park block has also been purchased.
The Site Masterplan for the new hospital was made public in February 2019.
Demolition has now started on the first building. The Ministry of Health is continuing negotiations to acquire additional land for the new Hospital.
The concept design for the Ambulatory Services Centre was completed in September 2019, while the concept design for the Acute Services Building is due to be complete by November. This will confirm the location and approximate size of each building and their respective services. Interviews are also being conducted to find an architect for the next design stage. The preliminary design is expected to take six months to develop after which point the developed design phase will commence. The Ministry of Health is also continuing negotiations for site acquisitions for the remaining parcels of land required.
In September 2019, a Market Sounding Summary was released giving details of the engagement process. It notes that, as a result of market engagement, the development of the Detailed Business Case will consider a range of procurement options to ensure industry is able to adequately collaborate with the Government and be involved early in the project.
On 4 February 2020, the demolition contract was awarded to Ceres New Zealand LLC, with the demolition works to retain the Dairy Building and the design process to consider options for adaptive re-use.
Last reviewed: 10/02/2020