Dunedin Hospital: What you need to know about the plans, downgrade and protest

Thousands of people are marching on Saturday at a protest over possible cuts to their long-awaited new hospital.

• Read RNZ's live blog of the health protests in the South Island here.

But what exactly is planned, what changes will there be, and why are people upset?

Here is what you need to know.

What is planned?

The new Dunedin Hospital project is being worked on in two stages - the new inpatient building and the new outpatient building.

The outpatient building is well progressed, with the primary structure completed in June 2024, and work now focused on the windows and panels on the outside and the internal fit-out.

The building is expected to be finished in 2026.

It will include clinic rooms, day surgery facilities and planned radiology.

Read more:

• Did National check its numbers before new Dunedin Hospital promises?

Meanwhile, piles have started going in for the inpatient building, and the building is expected to be completed by 2029.

The most recent plan says it will include an expanded emergency department, operating theatre suites and short-stay surgical unit, intensive care, inpatient wards and a dedicated primary birthing unit.

What's the problem?

The specifics of the project were thrown into doubt this week, when Minister of Health Dr Shane Reti and Minister of Infrastructure Chris Bishop said a report commissioned by the government found the current plans could not be delivered within the current $1.88 billion budget.

They said the planned redevelopment needed to stay within its current budget and would either need to be reduced, or done in stages, amid fears the cost could balloon to $3b.

One option is revising the project within the existing structural envelope, such as by reducing the floors, delaying the fit-out of some areas, or looking at services that can be kept at the original site or in other Health NZ buildings.

Another option is a staged development on the old hospital site, including a new clinical services building and refurbishment of the existing ward tower.

Will this push back opening dates?

Health NZ head of infrastructure delivery Blake Lepper says the outpatient building remains on track for opening in 2026, and that is a "real focus".

However, he will not say whether the ministers' announcement has changed the scheduled dates for inpatient services to be delivered.

"No decisions have been made."

Piling work continues on the inpatient building. This is expected to be completed by mid-October, he says.

The project is currently receiving pricing for the above-ground construction of the inpatient building. Lepper says any discussions between parties are commercially sensitive and he cannot provide any further details.

What has been the response?

Dunedin City Council is planning a protest march calling for the planned new hospital to go ahead unchanged, after widespread speculation there would be cuts and comments from the new Health New Zealand commissioner Lester Levy that the project was under review.

On Thursday, mayor Jules Radich said the $3 billion figure given by the ministers was an exaggeration.

"They've included in that things like carparking and pathology and other services that were never in this scope, and were taken out of the scope two years ago."

The government appeared to be looking for an excuse to get out of its promise to build the new hospital, he said.

The cost of the project had started out at $800 million, and the latest figure had been almost at $1.9 billion, but he said the idea of it now leaping to $3 billion was unfeasible.

Pete Hodgson, an ex-health minister and MP for Dunedin North, as the electorate was formerly known, also said this week he did not believe the $3b figure.

"That is sophistry. That is nonsense. We're dealing with sophistry from ministers, trying to get the figure up to $3b so that the rest of the country can say, 'That's outrageous'.

"[It] is nowhere near as serious as that. Nowhere near it."

The idea of building "half a hospital", or something "inadequate", was bizarre, he said.

"This hospital has been subject to a good deal of cost analysis and value management, value engineering... over the years. ..You simply can't cut it back and have something that has clinical integrity."

How did we get here?

The project has long been beset by delays and changes.

• 2015: Ministry of Health appoints Southern Partnership Group to lead hospital redevelopment. It puts out business cases for two options: in both, the estimated cost of the project is between $1.2b and $1.4b.
• 2018: Ministry announces the project will be done in two stages - the inpatient and outpatient buildings; now expected to cost $1.4b.
• 2021: Labour government approves in principle the final detailed business case; cost has gone up to $1.47b.
• December 2022: Amid fears of rising costs, there is a redesign, resulting in a plan that will see fewer beds, two fewer operating theatres, and one fewer MRI and PET CT. The cost is $1.58b, but soon goes up to $1.59b with the addition of a MRI and a collaborative workspace.
• 2023: After the election, the new government says the cost of the proposed project has risen to $1.88b. It commissions an independent review by Robert Rust, whose report led to ministers saying this week costs have blown out to nearly $3b.

The protest

Even before this week's announcement, the Dunedin City Council had planned a protest over the feared cuts, and released a rejigged version of the famous Highlanders song.

The council-organised march on 28 September will begin at 12pm outside the dental school.

Radich earlier said the message was simple: "No clinical cuts. Keep your hospital promise."