Pelli Clarke & Partners’ Post

Cost Blowouts and Governance Failures at New Dunedin Hospital: Time for a Project Rescue? The New Dunedin Hospital project, approved in 2018 with a budget of NZD 1.4b faces major challenges. The plan included a 13,000 sqm Outpatient Building and a 74,000 sqm Inpatient Building for completion by 2026 and 2029. However, costs have now escalated to NZD1.9b. Yesterday, our Infrastructure and health ministers announced that the project would be rescheduled and possibly abandoned after cost estimates surged to NZD3b (NZD30,000+ per sqm), which is three times the cost of similar projects in Europe and the US. An independent review (https://lnkd.in/gdFM-SBM) highlighted governance, cost and [risk management issues. The Outpatient Building will progress, but the Inpatient Building has budget and scope issues, with insufficient contingencies. However, procurement and contracting—key causes of the infrastructure failure—were not addressed in the review. My Assessment and Recommendations 50-60% of infrastructure projects experience cost overruns and time delays, but this case is more severe. Fundamental errors were made by starting procurement and construction without a detailed design, reliable cost estimate, or appropriate contingencies. Here’s how I recommend moving forward: 1. Immediately Cost Revision for the Outpatient Building: Revise cost estimates immediately to prevent further overruns and keep the Outpatient Building on track (carve out a separate contract for this). 2. Renegotiate Contracts for the Inpatient Building: The Inpatient Building contract should be renegotiated with the help of a procurement specialist. The current contractor will want to avoid reputational damage, so renegotiation is feasible. Meanwhile, explore alternative contractors with hospital experience: Here are three suggestions: China State Construction Engineering Corporation (CSCEC) – the largest global construction firm. Laing O’Rourke (UK) – specialists in large hospital projects, such as Alder Hey Children’s Hospital. Skanska (Sweden) – known for their work on the New Karolinska Hospital. 3. Comprehensive Project Cost Update: Revise all project costs, risks, and timelines, focusing on the Inpatient Building where risks are highest. 4. Engage a Specialist Rescue Manager: A specialized project rescue manager is essential. Firms like Mott MacDonald (my ex-employer), Turner & Townsend, or McKinsey have the experience to bring this project back on track. 5. Use AI-Driven Digital Twin Technology: Integrating AI-driven digital twins can improve simulations and real-time monitoring, reducing future risks. Cost of Hiring a Specialist Rescue Manager. Hiring a top project rescue firm would likely cost 2-5% of the total project budget. With a budget of NZD3b, this would translate to NZD 60 million to NZD 150 million—a crucial investment to avoid further cost blowouts and delays. By taking these steps, the New Dunedin Hospital project can be saved.

In the fourth-most populous city in the country, Houston has 4.8 million patients visit the area for health care every year. It is no surprise there is a steady stream of health care construction in the area as Houston is known for its world-class health care, houses the largest medical complex in the world, and boasts a jaw-dropping 85 hospitals and more than 19,000 beds. For Houston to continue to lead the way in medical innovations, it works to build and provide patients with state-of-the-art health care facilities. Health care construction, especially hospital construction, changed due to the pandemic, which forced hospitals and builders to rethink the hospital environment, how it is designed, built and arranged to make it even safer and more adaptable. Skanska is continuing to see trends in health care construction. Read "5 health care construction trends shaping Houston’s future," written by Dennis Yung, EVP/GM for our Houston/North Texas Building operations. https://lnkd.in/eKb34M7A #Skanska #Healthcare #Construction #Development #Texas

Why Is Healthcare Moving Towards Modular Construction Methods? Post-pandemic, the construction industry faces new challenges with paused projects and supply chain issues. Facility managers are adapting to urgent, time-sensitive projects by increasingly turning to modular construction. Our ramps and stairs are excellent for primary family care, therapy, diagnostics, emergency clinics, and other modular construction medical facilities. #upside #ramps

National children’s hospital debacle shows State must avoid mismanaging mega-projects: The picture painted of the national children's hospital project by the PwC report is one of incompetent management by the State

Discover how our construction project cost advisory team transformed Mercy Hospital after tragedy hit.  Explore the story of how our services kept reconstruction costs on track in our latest healthcare case study: https://lnkd.in/gGyNW3ae Tornado-Damaged Hospital Keeps $300M Rebuild on Time and Under Budget | Armanino #ConstructionAudit #HealthcareTransformation #CostOptimization

👀 Check out this timelapse view of the construction of Yeovil Diagnostics Centre! 🏗 Prime is delivering the purpose-built facility alongside Somerset NHS Foundation Trust and contractors Darwin Group, with 72 modules successfully installed across eight nights, minimising disruption to the hospital. The three-storey, 2,687m2 centre was designed to utilise Modern Methods of Construction (MMC) to enable the scheme to be delivered within a ten-month construction period, ensuring that the Trust and local community can benefit from the centre later this year. The project is being delivered up to 60 per cent faster and with up to 90 per cent less waste than traditional building methods, making it one of the most efficient and sustainable options in the marketplace. The centre prioritises sustainability, boasting a high-performing, low-energy design that achieves net zero embodied carbon and a projected biodiversity net gain of 267%. The building achieved BREEAM Excellent design stage certification which puts it within the top 10% performing newbuild non-domestic buildings in the country. It will provide over 70,000 diagnostic tests and outpatient appointments annually, offering a range of diagnostic services and a comprehensive range of outpatients services. It means that patients won’t need to go to busy hospitals for some diagnostic tests, freeing up capacity for patients who require more complex care. Read more about the project here 👉 https://bit.ly/4bovgAH #MMC #sustainability #healthcare

The right combination to fast track a project, off site building modular construction concurrent with site infrastructure development and foundations.

The current state of our CWM and other Hospital infrastructure highlights an urgent need for modernization. As the facilities age, maintenance becomes increasingly costly and inefficient. Instead of continuously investing in an outdated structure, we must focus on building a new, state-of-the-art hospital that meets the demands of contemporary healthcare. From a construction and engineering standpoint, a phased approach to constructing a new hospital is the most cost-effective and efficient solution. This method allows us to integrate advanced medical technologies and modern design principles from the start, ensuring a future-proof facility. Our proposal involves a strategic, phased construction plan, where each phase targets a specific section of the hospital. This approach ensures that the project is manageable and financially sustainable while minimizing disruptions to ongoing healthcare services. This initiative goes beyond political affiliations—it’s a call for collaborative efforts to improve our healthcare system. The current Fijian government has a unique opportunity to take a visionary step by initiating this construction project. Existing facilities can be repurposed for administrative or research purposes, ensuring that no part of our infrastructure is wasted. Building a new CWM Hospital will benefit our healthcare system and demonstrate our commitment to the well-being of our citizens. It will stand as a testament to our ability to innovate and adapt, providing future generations with access to world-class medical care. It's time for bold action, not political games. #Healthcare #Innovation #Engineering #Fiji

I’m all about supporting fresh solutions for healthcare, and I believe modular buildings could transform the landscape even further when it comes to how we provide care. With our focus on being quick, flexible, and eco-friendly, modular construction is a smart way to tackle the challenges our healthcare systems are facing today. One of the biggest perks of modular structures is how fast we can manufacture them and they can be put together. When a crisis hits, like during public health emergencies or natural disasters, having the ability to quickly set up healthcare facilities can literally save lives. Another brilliant aspect about modular buildings is their flexibility. As healthcare needs change, these buildings can be easily modified or expanded, without the usual long wait times and patient disruptions. This can be pivotal as we see more demand for services, innovation and expansion. With sustainability being so important in healthcare today, our buildings can really help reduce facilities' environmental impact. As we think about the future of healthcare, using modular buildings could be a key piece in creating care environments that are more responsive, efficient, and sustainable. Have a look at some of our healthcare case studies and see how we are pushing what can be achieved with volumetric solutions below. Feel free to get in touch with me to discuss how Premier Modular can support further 🙂 ◽ 07485901847 ◽ Stuart.Nel@premiermodular.co.uk #NHSWinter #ModularSolutions #HealthcareInnovation #Offsitesolutions #FastTrackSolutions #NHS

Modular construction is gaining traction in healthcare, offering a faster and more efficient way to expand. This approach allows for precision construction and can significantly reduce waste, making it an attractive option for hospitals looking to address capacity challenges and shorten construction timelines. Read the full article here 👇 https://lnkd.in/enY7eaS2