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Construction on a new hospital in Dunedin is resuming after the project was paused last year amid a series of challenges and public backlash.

It is the latest step in a project that has been mired by delays, budget blowouts and political controversy. Last year an estimated 35,000 people marched through Dunedin protesting concerns that potential cutbacks could compromise the hospital’s design.

A review projected the hospital project cost, initially estimated to be between $1.2 billion and $1.4b in 2017, could now balloon to $3b. But Prime Minister Christopher Luxon is not budging, insisting the hospital will be built for $1.9b.

Health Minister Simeon Brown announced work was once again under way on the new Dunedin Hospital’s inpatient building, which when complete will be the largest single health facility in New Zealand, covering approximately 70,000sq m.

Around 35,000 people gathered in Dunedin to protest cuts to the new hospital. Photo / Ben Tomsett

While construction on the inpatient building was paused, work on the outpatient building continued.

Brown said a new community engagement group would be set up, tasked with relaying regular updates about the hospital’s construction to residents.

The group would include Health New Zealand leaders, local stakeholders, including representatives from local government, infrastructure partners and tertiary institutions.

The group would meet quarterly to consider issues related to the completion of the hospital. It would not provide advice on the building’s design scope, clinical models of care, or procurement decisions, Brown said.

“The new Dunedin Hospital will be the largest health investment ever made in the South Island. We’re getting on with the job and the mayor and I want to make sure the people of Dunedin and the wider region are kept informed every step of the way.”

The new Dunedin Hospital is back under construction on the former Cadbury factory site. Photo / Ben Tomsett

Dunedin Mayor Jules Radich welcomed the group’s establishment, saying his community was “rightly passionate” about the new hospital.

He was pleased the Government had agreed to continue building the hospital on the former Cadbury factory site, which was purchased by the previous Labour Government.

Previously, Brown said the site had numerous construction challenges such as contamination, flood risk and access issues, but the Government was confident these could be overcome.

Julia Gabel is a Wellington-based political reporter. She joined the Herald in 2020 and has most recently focused on data journalism.