Royal Hobart Hospital Decision

12 December 2014

The Tasmanian Government has accepted and will implement the recommendations of the Royal Hobart Hospital Redevelopment Rescue Taskforce for the project to proceed on the current site.

The Rescue Taskforce has concluded that the project can proceed, with important additions to the redevelopment including:

  • the addition of a crucial helipad which was omitted from the former government's original redevelopment
  • $2.4 million in additional funding for contemporary standards and outdoor areas for the Mental Health Services
  • funding for a safe and achievable decanting plan involving the construction of a temporary facility onsite at the Liverpool Street forecourt and
  • accelerated replacement of the hyperbaric chamber, which is approaching end of service and was identified by the taskforce as a potential construction risk not previously identified.

It includes a construction methodology and decanting plan that eliminates the major cost, time and patient safety issues identified prior to the investigation.

Critical works will recommence in early 2015. The project is now scheduled for completion by the end of 2018.

An additional investment of $71.9 million is required for the project which is consistent with the budget overrun identified at the time the project was put on hold. Moreover, an investment of $154 million has already been made redeveloping the RHH site through the earlier phases of the project, and scoping and designing phase three of the project.

The redevelopment will create hundreds of jobs and the total economic activity generated for the state's economy will be $1.6 billion.

The findings and recommendations adopted by the Government provide a clear pathway for construction and decanting patients that mitigates risk and optimises space for clinical services.

They underpin a project that can be managed to budget and delivered on time, with minimal disruption to patients.

A pre-feasibility assessment of the CenoTas proposal was also undertaken by the Taskforce for Cabinet, with advice taken from other agencies including Treasury. The Taskforce's recommendation was that the financial and time costs to the Tasmanian Government to progress this proposal are prohibitive and that it suffered from unclear and inadequate health planning.

It was also noted that there were several major legislative and funding hurdles to the CenoTas proposal proceeding. Treasury identified that if the Government funded the project using TASCORP, which has lower funding costs than a private financier, then the State Government's debt would increase by up to $2.6 billion by 2018. This would in turn negatively impact on Tasmania's credit rating.

The recommendations put forward by the Taskforce have been accepted the Government has agreed to proceed with the Redevelopment of the RHH site.

Key findings and conclusions of the Taskforce:

  • The redevelopment of the RHH is feasible and can proceed.
  • Substantial time, energy and money have already been invested in the redevelopment of the RHH site. Moreover, the time and costs of an alternative greenfield development are prohibitive.
  • The scope of the project is consistent with the Commonwealth-State IGA requirement to provide 195 overnight beds and other outputs.
  • A new construction methodology has been determined which provides better outcomes for patients, is safer and has the shortest construction program for K-Block.
  • The completion date will need to be renegotiated with the Australian Government to the new completion date of late 2018.
  • Work will recommence early in 2015, potentially sooner.
  • The total cost of the project would be $657 million which would require a further investment of $71.9 million. This includes the costs of decanting, an improved design for Mental Health Services and the inclusion of a helipad in the project.
  • The project will support the delivery of contemporary models of care for services located in K-Block and provide enough flexibility to accommodate changes identified during health reform planning, changes to models of care over time, or in response to future demand.
  • The design of K-Block was based on significant clinical consultation but a small number of outstanding concerns remain which can be largely redressed by the design proposed by the Taskforce:
    • an increase in single beds for women who have had caesarean or complex births can be accommodated through limited redesign and
    • a more contemporary design for mental health inpatients which provides more outdoor recreational space with a further investment of $2.4 million.
  • The inclusion of a helipad is supported by clinicians and Ambulance Tasmania and is proposed by the Taskforce at an additional cost of $10.5 million.