Delays Raise Questions over Troubled Hospital Project 2

Thursday, October 8th, 2015
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The announcement of several months of delays has raised further questions over a troubled project to build a major children’s hospital in Perth which has been dogged by disputes with subcontractors.

Acknowledging the latest delay as he unveiled designs for children’s play equipment for the Perth Children’s Hospital and for Elizabeth Quay, Western Australian Health Minister Kim Hames said practical completion of the new hospital was now not expected until February next year.

Given that construction will be followed by several months of preparation works, it is likely the new hospital will not open its doors until around the middle of next year – well behind the originally planned opening time of late this year.

“We just want to make people aware today that the construction company John Holland are behind time,” Hames is quoted as saying in The West Australian. “The practical completion of the building isn’t going to be November 30, which is our contract with the company.

“We have had advice from the company they are expecting it to be February but we don’t know until we get closer to that time.”

Set to replace the Princess Margaret Hospital for Children, which was constructed more than 100 years ago, the $1.2 billion Perth Children’s Hospital project has been dogged by controversy and disputes.

Perth Childrens Hospital

In June, it emerged that John Holland was facing demands for payment of $8.6 million from sub-contractor Yuanda Australia, which was involved in work on the project’s external façade. Similar claims were lodged by two other contractors.

That same month, Acrow Ceilings managing director Ross McGinn tragically took his own life, his son saying the company had been waiting on progress payments totalling $2 million from John Holland in respect of work on the Children’s Hospital project.

While a government examination later cleared John Holland of any wrongdoing with regard to its payment process as set out in the subcontracts, the developments do raise questions about whether or not there was a breakdown contractor/subcontractor relationships.

Further questions revolve around what Hames puts the causes of delay down to – difficulties in sourcing façade panels from the Philippines and a change in ownership in John Holland.

Many would argue that the latter – to any extent that it contributed to the delay – does not constitute an excuse, and that any change in corporate ownership and control should be seamless from a customer perspective.

Acknowledgement of the delay came as Hames unveiled designs for the Perth Children’s Hospital playgrounds as well as at Elizabeth Quay.

PCH will involve more than 3,500 square metres of gardens and play areas including a large therapy garden, while Elizabeth Quay will feature an island playground.

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  1. David Chandler

    Australian governments just do not get hospital construction. They are not rocket science. The Royal Adelaide and Sunshine Coast Hospitals are now ranked in the 10 most expensive in the world. The cost per bed on a comparable basis with other regional hospitals is way out of whack with what they should be. The PCH has been plagued with problems from the outset. The project was poorly conceived and poorly procured. The initial cost of a hospital embeds costs that linger for the life of the facility. These erode future governments ability to deliver more services or do essential maintenance on other buildings. The commonwealth should take a closer interest in the way Australian public hospitals are delivered. They are far from value for money and they are unsustainable. It's like almost every hospital needs to be reinvented. They are all so carried away with beauty contests that their reason for being is almost a second consideration. The stories coming from the PCH are outrageous. The public cost of such hospitals is not justified.

    • Lee Hunter

      I agree – there should be some standardisation given they all provide the same service. Huge efficiencies and cost savings would flow on.