Escalating construction costs are a fact of life as the $1.47 billion budget for Dunedin's new hospital comes under pressure, Minister of Health Andrew Little has warned .
Construction has begun on the 421-bed hospital on the old Cadbury chocolate factory site after lengthy project delays.
The outpatient building is due to open in 2025 and the inpatient building in 2028.
While there had been "reasonably significant" rises in construction costs, Little said there was contingency funding for the project.
"We know what the current budget is based on current cost expectations, but this is a project that has six years ahead of it and cost escalations are a fact of life," he said.
"We will continue to manage the demands of the budget, but ensuring there is a hospital that meets locals' needs.
"Where the final cost comes in at remains to be seen."
The hospital will have 16 theatres and 30 high-dependency beds.
The construction phase is expected to create the equivalent of nearly 1000 full-time jobs and add $429 million to the local economy.
Southern District Health Board chairman Pete Hodgson said there was potential for delays arising from the pandemic and the war in Ukraine.
"The things that will cause delay and may still cause delay are the supply chain problems, which do arise from Covid I do understand, or indeed Ukraine. So those are the issues which may cause us problems in future, we don't yet know," he said.
In 2017 the Labour Party campaigned on beginning construction of the hospital in its first term in government.
Former health minister David Clark pulled a single weed from the Cadbury site in February 2020, claiming the "construction phase" had begun.
He would not concede the government had broken its promise, saying he was "chuffed" to see the progress.
"It depends when and how you define construction," he said.
Little provided a Covid-19 RAT test and a signed N95 mask for a time capsule that will be sealed in the new building.
RNZ
