Source: Radio New Zealand
The project management office for the new Dunedin Hospital. RNZ / Delphine Herbert
Health New Zealand says two of its flagship hospital rebuilds are on track despite red alerts put on them months ago.
The red ratings on the Nelson and Dunedin projects were in the latest publicly available investment report from Treasury dated mid-2025.
Around that same time, the central health agency had rated itself badly with Treasury for how it managed its billions in assets, joined in the dog-house by Police and Defence on the latest measurement known as the Chief Executive Annual Attestations.
The Treasury investment report meanwhile showed the Dunedin outpatients building project under cost pressure, by a sum that was blanked out.
It also redflagged Nelson to ministers for not having its business case ready in time for Budget 2026 decisions.
Health NZ said on Wednesday that this related to Nelson’s future stages of work and there was no impact on construction timelines or the expected operation of new facilities.
“The project continues to progress as planned,” said head of delivery of infrastructure, Simon Trotter.
The Nelson project was shrunk to under half its former budget and cut into phases by the present government.
In Dunedin’s new hospital build, the cost risks had since been managed and it was expected to open within budget on time later this year, Trotter said.
The wider programme that included the bigger inpatients build was also expected to be delivered within approved funding.
The total budget was set at $1.88 billion a year ago after the government rescoped it in the face of public protest, on the grounds sticking with the previous plan would blow it out to maybe $3b.
Health Minister Simeon Brown (R) and Nelson Mayor Nick Smith (second from right) open the new emergency department at Nelson Hospital in November 2025. Samantha Gee / RNZ
Trotter also commented that a red rating reflected an assessment against specific reporting measures at a point in time and “does not necessarily indicate a delay to delivery”.
However, Treasury’s description of a red rating was that: “Successful delivery appears to be unachievable. There are major issues which at this stage do not appear to be manageable or resolvable. The programme may need re-baselining and/or overall viability re-assessed.”
Falling short on keeping up
In the other Treasury pulse-taking reports to ministers – the attestations – Health, Defence and Police scored the worst for meeting higher standards for managing their billions of dollars of assets.
Infrastructure experts have castigated public agencies in general for not keeping across the state of their buildings or spending enough on maintenance – the country’s leaky courts have been an egregious example of lack of maintenance, which a series of expensive projects were now trying to sort out.
Since 2023, 62 agency chief executives have had to attest to Treasury annually on how they measure up in 25 areas such as taking care of really critical assets.
A minnow like Antarctica NZ that has been caught up in stop-start rebuilding was non-compliant in only one of the 25 (some measures did not apply) in the latest attestations done last July.
One or two non-compliances were common, such as at Internal Affairs, and perhaps surprisingly Justice, and Kainga Ora, which has massive assets. Education complied with all 25.
By contrast, Health NZ failed in more than half – for 13 out of 25 measures, including being too slow setting up investment assurance standards for its failure-prone digital services; and not properly keeping track of “the identity, condition, and risk exposure” of its service-critical assets.
This last was a black mark against the Defence Force, that missed on seven measures, even as it struggled with a $2-3b refurbishment of rundown housing and other facilities.
Police were non-compliant with the watchdog’s demands on eight fronts, telling Treasury they were five-10 years away with some, such as getting all their asset management plans done or having an IT set-up that could keep track.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
