Hospital shocker

Harry Sullivan
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Projected costs for new facility rises almost $25 million

Hospital shocker

TRURO - Projected costs for the new regional hospital have increased yet again, by almost $25 million.
And the new price tag of almost $180 million presents a "serious challenge" for a deficit-ridden government on a project already "significantly over budget," Health Minister Maureen MacDonald says.
"It's a challenge. I recognize we have a problem and it's a serious challenge. All I can say is we'll work very, very hard to bring this project to completion and we'll do it in as cost-effective a way as we can, understanding that the situation I inherited wasn't a good situation to begin with. So it's very hard to turn such a significant problem around," MacDonald said during a telephone interview on Monday.
"We don't have an unlimited amount of money to spend on every capital project or on just one capital project. And this project, we have to get some control of it and that's what we're working to do."
When she was initially notified of the problem after taking office last summer, MacDonald said the funding shortfall stood at approximately $34 million. That figure has since been decreased to $24.6 million, which brings the projected cost of the new facility to $179.6
When the project was announced in December 2005, the price tag was set at $104 million. A little over a year later, however, the estimated cost had shot to $155 million, at which time the province upped its previous contribution of $78 million by an additional $51 million.
The extended Colchester/East Hants community, through private, corporate and municipal donations, has so far contributed $26 million.
MacDonald said it has not been determined whether the province can increase its contribution to the project but said a recent meeting was held with the chairman of the hospital foundation and District Health Authority CEO Peter MacKinnon and further requests for financial aid to the community have not been ruled out.
"Right now we're reviewing and considering what is our ability to add additional resources into this problem and what, if any ability, does the community have to come to the table with additional resources," she said.
MacKinnon said the budget shortfall is the result of tenders for the mechanical and electrical components of the project, which came in much higher than had been budgeted for.
"It's a complex process and issue," he said of the estimating that goes into the tendering process of such big-ticket items, especially in a "volatile, changing market" to which only a limited number of firms can participate.
The hospital was scheduled to open in 2011 but the funding shortfall has created delays, which in turn result in penalties being paid to the primary contractor.
"That is a question we've been trying to puzzle our way through," MacKinnon said of the now-undetermined completion date. "We won't really know the full extent of that or what the exact delay is until we have our tenders back in and contractors on board to review the schedule in detail."
MacKinnon did not want to discuss the amount of penalties the delays are expected to cost the health authority and MacDonald said she doesn't have those figures.
"It's a variable rate so it's very hard to say, 'This is the rate,'" she said.
"Penalties in the construction industry are a normal part of doing business. However, this project is significantly over budget. It was significantly over budget before I came into office and it was significantly over budget when I came into office and we have been working to get these costs under control so that at the end of the day the taxpayer of the province gets a good deal in terms of value for dollar."

Organizations: District Health Authority

Geographic location: East Hants

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Recent comments

  • Local
    March 01, 2010 - 14:40

    A good example why we shouldn't build the civic center, it will cost us more than we can expect.

  • dave
    March 01, 2010 - 14:40

    a pox on all their houses.

  • jeff
    March 01, 2010 - 14:39

    i hope the guy that organized the hospital is not the same one looking after the civic center, to allow the prices to change so much.

  • Oh Please!
    March 01, 2010 - 14:39

    Sick and Tired: Oh please! get real, you must be either Billy or Bob, pretending someone else is interested in their self importance mission.

    Do private projects overrun by 90%?
    It has been proven the government is corrupt, why is anyone surprised? Civic center will be the same, they reason we have to buy these projects is simple. We need to repay the backers of these crooks, I mean politicians.

    Another 50 million will also be required there once the crooks have creamed that project too, I mean repaid their supporters.

  • Gilliad
    March 01, 2010 - 14:39

    Except for one comment, I agree with all the others: get rid of the Civic Centre blueprints for now. Actually, get rid of them forever, but that's a very personal opinion from someone who can't see ever using it.
    As for these horrendous increases, once was enough. It now seems as though the hogs (read contractors) are back to feed at what they must think is a bottomless trough.
    Maybe it's time to go out of province?

  • Tasman
    March 01, 2010 - 14:39

    Hey how about using the civic center money for the Hospital instead of building a center that only a few people want. Put it into the new Hospital instead, which is something most people will have some use for.

  • Aurora
    March 01, 2010 - 14:39

    I'm sorry, to be so crass, but exactly how many times can Health Minister Maureen MacDonald work the phrase before I came in to this office into a single interview???

    Guess what? This is a part of your job! You may not have started this project, but now it t is yours to finish.

    Stop boo-hooing about what you inherited and blah blah and work on getting the ball rolling to completion of this project for the community.

  • Sarah
    March 01, 2010 - 14:39

    Political parties always point the finger and blame someone else for the mess don't they?!
    But were the planners really this inept in initial planning stages? Were they seriously that incompetent that the projects costs have inflated by almost $80 million dollars?
    Maybe as a solution, some of the monies slated to go towards the new civic centre can be diverted into the new hospital project and the civic centre can be done right without the wasteful double-pool it is planning.

  • Waffer
    March 01, 2010 - 14:39

    Perhaps the money the politicians pay back from bogus expenses can go towards this cost?? Should just about cover it!!

  • How come?
    March 01, 2010 - 14:39

    How come, building materials have decreased in costs since this was estimated. How come it is still that far off!


  • doug
    March 01, 2010 - 14:39

    You think this is bad wait till the final cost of the civic centre comes in .See what that is going to cost taxpayers of Truro and Colchester.

  • John
    March 01, 2010 - 14:39

    Government planning almost always err on the low side. If they gave the real cost up front, the project would never be approved. So they low-ball the cost and let overruns (taxpayers) pick up the difference once the project is past the no-return point. Private businesses frown on this sort of thing.

  • Sick and Tired
    March 01, 2010 - 14:39

    Let me see .... I think I will make a list of all the things I don't use in the County/Town and whine about having to pay for them. This argument is getting old people! What does the Civic Centre have to do with the hospital? Just because one went over budget doesn't mean the other will. Let's see what the Civic Centre will offer - an arena, a fitness centre, a pool, administrative offices, conference rooms, ability to host concerts of all kinds. If any of you people can't find anything in there that wouldn't interest you I say get a life and focus your negativity on something else!

  • Break down please
    March 01, 2010 - 14:39

    Can we get a breakdown of the costs?

    That is a big chunk of cash to overrun without an explanation.