THE state government has scrapped plans for a full public private partnership for its new children’s hospital, opting instead to use the proceeds from its new royalties agreement with BHP Billiton and Rio Tinto to fund the hospital.
Health Minister Kim Hames said there would still be opportunities for private sector involvement in the design, construction and maintenance of the new hospital.
Mr Hames explained the change of plan by saying the royalties deal had delivered a “bonus amount of money” to the state.
The royalties deal will result in BHP and Rio paying an extra $1 billion to the state over the next four years, as well as a one-off $350 million payment.
“I’ve got that $1 billion there, to in effect build the hospital under the normal model,” Mr Hames told journalists.
“It’s one less issue I have to deal with if you like.”
Mr Hames characterised the new approach as simply a variation on the original PPP plan.
“It’s still a public private partnership in the sense that we will still go out for a design, build and maintain model. The only component that will come out will be the funding.”
The minister said the timetable for design and construction of the project would not be affected by the new procurement model.
“We haven’t proceeded very far down the track and its very easy for us to switch over, where the government puts up the money.
“There is no great downside for the companies that were wishing to be involved because the key component of the new hospital is designing it, constructing it, and managing it.
“That is where the companies make their money in the long term.”
Mr Hames said the hospital’s new multi-storey car park would proceed as a full PPP, with private funding.