No extra cash for $384m hospital redevelopment despite escalating costs

Mary-Anne Thomas, who was in Warrnambool on Tuesday, January 23, 2024, said the project would be delivered "in the most cost-efficient way and in the already announced budget".

The Standard reported in November costs had increased, putting a proposed 120-space underground carpark at risk of being scrapped from the $384 million redevelopment.

On Tuesday, The Standard asked Ms Thomas if the budget would be increased and whether the underground carpark would be included.

She reiterated there would be 400 car parks available during construction and when the project was completed but would not be drawn specifically on the underground facility.

The Standard asked Ms Thomas: "Can you guarantee the redevelopment will include a 120-space underground carpark facility?"

Ms Thomas responded with: "So as I said - I think it was quite clear - the project will deliver up to 400 both during and completion of the project."

The Standard replied with: "OK and the underground carpark facility will be part of that?"

Ms Thomas responded with: "Again, I think the important thing is about the carparks and the availability of those car parks."

Ms Thomas acknowledged construction costs had risen but said the budget would not be increased.

"Cost escalations on construction are being felt right across the state, across the nation and indeed around the world," she said.

Ms Thomas said this was due to a range of factors including the COVID-19 pandemic and international conflict.

"All of these things have contributed to pressure on our project," she said.

"But our commitment as a government is to work in a financially responsible way and to work to value manage as best we can."

Calculations by The Standard using the government's own construction cost estimates suggest the Warrnambool redevelopment budget would need an extra 14 per cent or $50m to deliver everything promised in the original announcement.

The redevelopment would be the only recent major health build across Victoria to not have its budget increased.

The Standard reported earlier this week the project works were set to start a year behind schedule.

But Ms Thomas said she believed the project would be delivered to schedule.

She announced Hansen Yuncken had been appointed to complete the early works to prepare for the main development.