23/06/2010 - 14:13

Urgent action needed for hospital risks

23/06/2010 - 14:13


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Auditor General Colin Murphy says urgent action needs to be taken to avoid further cost blowouts or time delays on the $1.76 billion Fiona Stanley Hospital project.

Urgent action needed for hospital risks

Auditor General Colin Murphy says urgent action needs to be taken to avoid further cost blowouts or time delays on the $1.76 billion Fiona Stanley Hospital project.

According to a report tabled in parliament today, the capital budget of $1.76 billion is $1.3 billion more than the original $420 million estimate, and there are significant risks that this could blow out further and the scheduled opening date of May 2014 could be delayed.

Mr Murphy did acknowledge, however, that the project budget had been stable since 2007, which was a "promising sign."

"That being said, the project's got another three years to run, the facilities management contract hasn't been taken on board, and they are about to let stage two of the contract, so there is enormous potential for further costs," Mr Murphy said.

"It really does depend on how the project team and the steering committee go about their task, the very important task, of managing the costs and scope of the project."

The Auditor General's report identified several risks that could delay the project, finding there is no transition plan in place, workforce planning is behind schedule despite the need to recruit 2,000 staff, and new information technology may not be ready and tested in time for the hospital's opening.

"The urgent attention is really about the risks going forward," Mr Murphy said.

"The building project is actually in a reasonable position at the moment in terms of the contracts.

"What we have identified though is having a building is one thing, but to operate as a hospital it will really need staffing, transition and equipment and a whole lot of things.

"When we looked at planning for transition and for workforce and for information technology, they're certainly well behind where they should be at this stage, so a lot needs to be done in addressing those issues."

Mr Murphy said transition planning was particularly important considering there will only be a three-to-four month period between when Brookfield Multiplex is scheduled to hand over the site to WA Health in January 2014, and the hospital opening in May 2014.

"They should be starting on transition planning right now, so all of those arrangements to do with facilities, staffing, workforce planning, all of those arrangements should be planned for right now," he said.

"It is a massive undertaking, it is the largest building project that the WA public sector has ever undertaken so yes, it will be complex and there will be a lot of planning work to be done to make sure that everything inside the hospital, the staffing, the medical staff, the administrative staff, the information systems and the equipment all work together."

Also, the report found additional risks remain around the awarding of the second stage of the main builders' contract, and a facilities management contract.

Brookfield Multiplex was awarded the $220 million first stage of the project, while the second stage contract is expected to be announced in August.

WA Health will also award a $2.5 billion, 20-year contract for the provision of administration, cleaning, catering and building maintenance at the hospital.

"Any delays in awarding these contracts could result in delays to the hospital opening date and it is vital that the managing contractor and the facilities manager work together effectively to make sure the hospital is build and operational by May 2014," Mr Murphy said.

"The state is responsible for the coordination of the two contractors and failure to do so could also increase whole of life costs."



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