When the media is being blocked from a Supreme Court visit to one of the nation’s biggest hospital construction sites in what is dubbed a ‘defect tour’, that is a sign that not all is going as it should.

Yet that was what happened when the Court toured the site of the $2 billion new Royal Adelaide Hospital last November, which the government alleges has faults including incorrect room sizes, air-conditioning defects, sewer pipes in a data equipment room, a 200-millimetre ceiling space and a 2.8-metre high loading dock instead of one which was meant to be 3.5 metres.

By all accounts, the project is going badly. Originally slated for technical completion on April 4, 2016, media reports suggest it is a year behind schedule and as of yet has no clear opening date. The consortium responsible for delivering the project is locked in a bitter dispute with the government about the latter’s rejection of a plan to fix defects associated with the project. In November, The Advertiser reported that investors in the new hospital would seek to recover up to $4 billion in damages from taxpayers if the government moved ahead with threats to tear up the consortium’s contract.

Things have not gone much better on the $1.2 billion Perth Children’s Hospital Project in Western Australia, where persistent delays mean there is no clear completion date with respect to a project that was originally set to finish in May 2015. There have been multiple problems on the project, including allegations of subcontractors missing out on progress payments and delays where asbestos was found in some of the Chinese roof panels.

Whilst hospitals are challenging and complex projects, these examples prompt questions as to what can go wrong and how we might improve.

According to one source who spoke on condition of anonymity, healthcare projects by nature carry with them a number of challenges.

First, there is the need to reach an agreement with nurses and doctors about what is from a functional perspective. The source said this process can involve a substantial number of people, multiple user group meetings and differing opinions which need to be worked through. In absence of strong project management skills, the source said the potential for confusion and delays at this point can be substantial.

Second, there is the challenge of managing a significant number of trades and disciplines under one umbrella program. Often, the source said, fitout and interior design elements can become detached from the construction program, potentially leading to delays where you have large volumes of concrete shell which is not fitted out properly.

Third, there is the complexity of a hospital itself, which has large numbers of individual rooms serving distinct purposes as opposed to repeating modules throughout. Whereas office buildings often involve a high-rise layout with a central services core, this is not typically achievable in the more sprawling setting of a hospital in which it is necessary to have a large number of cores doing different jobs and where it is often necessary to have plant dropped from the roof and fitted down into the various cores.

Finally, recent years have seen a number of hospital projects being undertaken largely at the same time – a phenomenon the source said puts strain upon available skills and resources.

“It’s mainly the sheer scale and the need to try to bring all of the different parties towards a single program which it all marches to,” the source said.

Nevertheless, the source said, the story was not all negative. In fact, a number of projects in Victoria have been delivered early. Whilst problems may have occurred on some projects, Australia did not have any form of overall crises when it came to delivering high quality projects within time and budget.

What is necessary is the sharing of lessons with regard to strategies which had and had not worked, the source said. For instance, the public private partnership model which has been used on several occasions in Victoria appears to have worked well and could possibly be used more often elsewhere. Furthermore, the importance of architects being active in the technical delivery of projects cannot be overstated. Architects, the source said, have a good view about how the project as a whole fits together and can provide importance guidance to contractors and subcontractors as to the big picture of the project vision as they go about their work.

Renowned construction industry advisor David Chandler is more scathing.

Chandler talks about a decline in what is considered to be acceptable involving "dumbed down clients" who are willing to pay "whatever premium is needed to transfer the risk to powerful and unaccountable contractors." He is aware of one installation of a nurse call system where low voltage shielded cables were called up (Cat 5) and a lower standard was installed. Because the LV cables were put in near HV (240v) wiring, the on/off of switches triggered the nurse call system – a problem which was discovered months after the first patients were admitted.

According to Chandler, healthcare projects are being led by large, risk averse enterprises which try to ring-fence themselves from accountability wherever possible. Many of these contractors, he says, have gone through significant ownership changes and upheaval, suffer from high staff turnover and have in some cases become distracted from the core task of building value for money.

These parties, Chandler said, hand over much of the work to consultants such as certifiers and quantity surveyors. The latter, he says, are often reluctant to challenge the overheads or procurement/packaging methods of the contractor for fear of rocking the boat and not being hired on the next job and suffer from considerable downward pressure in respect of fees and a lack of depth with regard to talent.

Meanwhile, Chandler says, main contractors have been too willing to accept excessive remuneration levels and inefficient work practices being incorporated into enterprise bargaining agreements.

Nevertheless, the anonymous source said it is important to avoid being overly negative. In fact, he said, Australia has a good record of delivering hospital environments with good design, and a number of overseas countries are in fact looking at us for leadership lessons.

“I prefer to put a positive spin on it rather than dwell on the negatives,” the source said. “I feel the people who have worked on those projects (the delayed ones) have learned a lot and there will be some particular reasons why those things have happened.

“It’s not all bad news. There are a lot of lessons which have been learned over the last 10 years. That has positioned us well for the future.”

  • A lot of Builders/Head Contractors don't seem to have these problems. And the challenges you describe– lots of overlapping trades, managing user group input, and varied complicated rooms– aren't just applicable to hospitals. I also think Mr Chandler is pretty out of touch if he thinks Builders get "excessive remuneration levels".

  • Andrew, another good article. Our Industry as a whole has been in decline for more than 10yrs and everyone knows this to be true. We have "Name Companies" who are appointed on their history but acknowledgement of recent ownership change is not taken into account. New owners dont necessarily follow the same "game plan" of the past. Next we have the lack of accountability on the part of the Architects, Surveyors and Engineers. Cutting of Red-Tape and self regulation is flawed. Lack of skill-set especially in the Government Regulators begs belief.
    Australia used to be the "Lucky Country", we were once proud of what we did and what we delivered. Lack of Licensing, regulations and accountability are the result of poor advice given to Ministers by Public Servants who have absolutely no idea. Ministers too, one in particular I could name, are too concerned with their public acceptance instead of doing their job. The buck should stop with the Ministers and yet they hide with their heads in the clouds denying anything is wrong. What happened to the old days when you made a mistake, you accepted responsibility and then you supposedly learned from it. What happened to accountability in the tender process where assessment was done properly. We all know lowest tender always wins. Adelaide Hospital is no different to any other project going on all over Australia today. Subbies getting screwed, developers running rampant raping and pillaging our Industry. Start holding Individuals to account, increase Licensing, make sure the "Regulators DO THEIR JOB" instead of stealing the wages they get every week and we might see a change.
    James, the Building Industry is really broken. For you to believe that the Builders and developers arent getting excessive remuneration is farcical. We need a total revamp with proper Industry imput from actual participants in the Industry as a whole(not Lawyers and Association CEOs who know absolutely nothing) and reign in the self regulatory bs that currently exists.

  • These problems are not unique to Australia and are quite common overseas. But overseas in countries such as France, they have better integration of design and services management systems incorporated within the head contractor, whereas in Australia we have a very fragmented system of seperate architects and consultants who all fight against each other, even though they're all working on the same project. IN my view there are very few capable client side PM's and fewer capable architects, as they're all heavily fee driven businesses and often enter with a director to win the work, only to hand it over to a junior to run the project. And that's when the wheels come off faster than a speeding train, and then they resort to throwing the builder 'under the bus'.

  • Thanks for another great article Andrew, although I see that we have a lot of issues with these projects falling down with emphasis on the Construction industry finding the cheapest product to do the job. These products are often imported and do not comply with the specification or meet the long performance required for Government Infrastructure projects. (Recent examples are abundant on the projects you have referenced and others are still to come to light).
    The true cost of these substitutions is often not realised for up to five years after completion when many of these products fail leading to costly maintenance or replacement. The fact that they failing before the project is delivered is highly alarming and indicates that there will be massive cost blowouts in Government's future budgets to fix the mess long after the builders and sub trades have moved on.

  • Ongoing lawlessness and non-compliance is endorsed Government policy. The motive is obvious and supported by a wealth of evidence; it is to protect big business first, last and always! Hence the failures, even the most extraordinary ones (consider all the hospital debacles in recent years), the ongoing use of asbestos despite it being supposedly 'illegal', the cladding, cabling, lead, etc. Only possible if Government sanctioned and enabled. To be so successful, two things must be in place. First, there must be no punishment of offenders- check the total lack of prosecutions and tiny penalties. Hence this Government guaranteed. And second, when any troublesome situations arise, everything must be kept hidden from the public – here but one illustration. With both 'strategies' now firmly established for decades, people have no hope of taking any action. The fact that workers are dying and being injured in the hundreds of thousands annually is totally irrelevant in a money-driven industry where people and their families, and the wider community are of absolutely no account. Apart from outright censorship being anti-democratic, it is the norm – we have not had a functioning democracy for decades. If voiceless, and if all the details of debacles are secreted away, where can the ordinary person go? What can the media write? The stories just evaporate away as planned. Thanks Andrew for bringing it to the fore, but sadly nothing will change.

    So much for a first world country, decent buildings, consumers, workers or sub-contractors getting a fair go – and so much for a democracy, accountability and transparency of the Biz-Bureau team! It is beyond a national disgrace and God help our children and grandchildren.

  • Government by allowing the bureaucracy to attempt to shift responsibility for all outcomes to head contractors/project managers without having proper oversight of such issues as meeting of AS or relevant codes is the root cause of the breakdown not only in hospitals but almost all Government funded projects. Few projects are being built to Australian Standards. The bureaucrats that promote these novated contracts do so as a means of off-loading responsibility for outcomes believing (perhaps) that that the strength of the contract will be sufficient to right any wrongs should that occur. In the 'real' world, we know that wont happen. Given that some attempt to right wrongs is undertaken, the delays to project will be considerable and very very costly. In the meantime the bureaucrats simply shrug and move on to the next debacle whilst the Minister stutters and stumbles around trying to protect his or her image. Simply the Government needs to take charge of its contracts; ensure that specifications for all aspects of the work are based on proper standards and codes; that supply and installation is only undertaken by approved fully experienced pre-qualified and licenced organizations. Importantly, its time to take a step back to the days of a qualified (experienced) Clerk of Works acting solely on ensuring compliance with the specifications, codes and approvals processes and the Governments intended outcomes. Most importantly, everybody in the chain has to be responsible and accountable; no buck passing and no hiding places and made to suffer the consequence. If they can't handle that then they shouldn't be in the system at all.
    Lastly but certainly not least, compliant Australian made building products should be given precedence over imports.