Fletcher secures $600,000-per-bed hospital contract

Friday 25th May 2001

Hospital site in Auckland

By Nick Smith

Fletcher Construction confirmed yesterday it was poised to sign the $600,000-a-bed contract to build the new Auckland Hospital - the project that saw the largest public sector capital raising since the Clyde Dam.

The district health board meets on Tuesday to sign off the design and price for the hospital and if approval, as expected, is given then the parties will sign the contract.

"The detail is all agreed," Fletcher general manager Peter Neven said.

"We have a frozen scheme, a frozen price and the conditions of contract are all agreed. We are all ready for signing. We are just awaiting board approval."

The nine-story, 710-bed monolith, which will replace acute in-patient services at Auckland, Greenlane and National Women's, will soak up most of the $423 million Auckland Healthcare raised for the project.

Auckland Healthcare spokeswoman Brenda Saunders said construction of the new helipad carpark was completed on time and within the budget of $13 million. It will be officially opened today.

It follows the completion of Labplus, a combined laboratory and mortuary, in December at a budgeted cost of $20 million.

Neither Fletcher or Auckland Healthcare are saying what the guaranteed maximum price, or GMP, is but the project will take the lion's share of the $423 million redevelopment, called the Health Services Delivery Plan.

Merchant bankers Bancorp took two-and-a-half years to put together the deal. The Crown provided $130 million in equity and $120 million came from the sale of 10- and 15-year bonds, with the remaining millions coming through arrangements with financial institutions.

More than a year ago, the contract for building went out to tender and, after a pre-qualification stage, was narrowed down to two companies - Fletcher and Multiplex.

Once Fletcher was selected, discussions started on design and the GMP.

Unsuccessful bidder Multiplex was happy with the tender process.

"I must applaud the efficiency of that approach," Multiplex director Shane Brealey said.

He warned Multiplex would give Fletcher a closer run for its money on upcoming major public works projects.

Fletcher has spent the past year working out design details with health authorities and once approval is given and the contract signed, work will begin in filling the hole in Grafton.

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