South Australia is crafting aggressive healthcare infrastructure designs. Yet three of the large hospital projects are facing deep delays and cost overruns. For example, the new Women’s and Children’s Hospital, the expansion of the Flinders Medical Centre and the new Mount Barker Hospital are all suffering significant delays. This scenario is alarming in terms of budget overruns and exceeding completion deadlines. The auditor-general’s blistering report released last week made these failures clear, illuminating the enormous financial cost to Ontarians taxpayers.
Budget: $3.2 billion It also aims to drastically enhance the quality of healthcare services provided to women and children across the region. It also encompasses a new 98-bed, seven-level tower next to the current facility that is scheduled to be completed in 2031. Every three-month hold up on this project will cost taxpayers $25 million more, illustrating just how high the financial stakes are.
Cost Overruns at Flinders Medical Centre and Mount Barker Hospital
Flinders Medical Centre have an announced cost blowout of $96 million and counting. This move draws the total projected cost up to a jaw-dropping $496 million. Originally budgeted at $120 million, the project came in with technical underspends of $41 million reported. Health Minister Chris Picton insists that the project is still on schedule despite these financial woes.
In much the same way, the new Mount Barker Hospital had its costs blow out by a jaw-dropping $146 million. At first, the project was estimated at $220 million. Now, the total projected cost has ballooned to $366 million, even with a $24 million underspend. Collectively, these fiscal irregularities spark serious concerns about the use of public dollars to build essential health infrastructure.
“We have just summarised there the status of those projects.” – Daniel O’Donohue
That’s why Daniel O’Donohue from the auditor-general’s office pointed to the enormous outlays within the health portfolio. He noted that so far we still lack a careful analysis of the factors driving those delays. He too underscored the importance of transparency, calling for clear tracking of how the money Congress has provided so far is being used.
“Because there has been a significant amount of spending happening through the health portfolio, we have wanted to keep a bit of an eye on how that money is being spent and where it is tracking against their expected spending profile.” – Daniel O’Donohue
Delays in Construction and Implications for Healthcare
Such delays have been widely recognized as contributing factors to the failure to start construction on these hospital projects. From Zambia, Associate Professor Nicholas Chileshe stressed that avoiding time lost in pre-construction allows for cost savings through scope and design optimization. He cautioned that continuing to defer will only result in increased costs due to inflation and supply chain disruptions.
“Delays during pre-construction phases can, in some cases, help to reduce long-term cost risk by allowing for refined scope definition, design optimisation, and risk allocation prior to tender.” – Dr Chileshe
He warned against extended hold ups that would hamstring projects in the middle of construction. This is particularly important given the current post-COVID climate, where market conditions continue to be unstable.
“However, prolonged deferrals that extend into or disrupt the construction phase can heighten exposure to cost escalation factors — including inflation in materials and labour, market volatility, and supply chain constraints.” – Dr Chileshe
Government’s Response and Accountability
Health Minister Chris Picton is adamant that all three hospital projects are still on track for their respective completion dates. This is not for lack of awareness about the delays and financial overruns. He noted that changes to construction schedules moved up the opening dates, never delayed them.
“These important hospital infrastructure projects being delivered by the Malinauskas Labor government are all on track and there is no delay to their scheduled completion dates.” – Chris Picton
Critics have long warned that the federal government simply doesn’t have the capacity to oversee such massive projects. Ashton Hurn noted that the Labor government likes to announce these projects as solutions to healthcare crises such as ramping. Despite this, he acknowledged that these initiatives have faced unprecedented hold-ups under their administrations.
