[VIS] Royal Adelaide Hospital Rebuild

[Aidan]

I have been trying to find any sort of document called something like "Comparison of Hospital Options".

As usual, there isn't one as far as I can tell. So how did the government reach the decision to build a new hospital on some free land that happened to pop up?

The answer seems to be that Durrow Health Services Management told them it was a good idea.

Why did Durrow tell them that? To understand it fully, I think you have to know a bit about British politics in the 1990s:
John Major was PM, but had never led his party to an election victory, and it looked like he was about to lead them to an election defeat. But he pulled a masterstroke: the Labour opposition had (or at least had a reputation for having) tax and spend type policies, so just before the election, he gave a speech about how lower taxes were good for the economy, and his party would be good for the economy because they'd cut taxes. It worked - people liked lower taxes, and safe in the knowledge that it was good for the economy, they reelected him.

But there was a problem: lower taxes weren't actually that good for the economy, and soon the government were running huge deficits, and people soon became concerned about the national debt. So the government introduced the Private Finance Initiative, so that the debt and the risk were transferred to the private sector. More often than not this was poor value for money. And while Gordon Brown was in opposition, he opposed them.

But then, to help shed their tax and spend image Labour made the election promise that they'd stick to the Major government's spending targets. It got them voted in, but if they were to keep the promise they couldn't fund much infrastructure in the normal way. Suddenly PFIs seemed very attractive, and the government enthusiastically signed as many PFI and PPP contracts as they could. But the private sector weren't very interested in upgrading hospitals - building new ones was more lucrative, so that's what was planned. And though such schemes were always subjected to a value for money test, this was usually fudged. Knowing that nothing at all would get done if the public sector option was found to be more efficient, authorities knew it was in their interest to make sure it wasn't, and nobody properly investigated what the best option really was.

Durrow Health Services Management was one of the companies involved in putting together some of those PFI deals. For legal reasons let me make it clear I'm not accusing them of deliberately fudging their value for money calculations on the RAH. However, considering their lack of experience trying to get the best value results with direct government funding, I have no faith at all in their ability to select the option that is genuinely most efficient here.

I really object to projects, instead of being a rational response to a need and properly compared to alternatives, being either porkbarrelling or the outcomes most desired by interested parties, whether they're politicians or developers.

I'd like to see all proposals costing over say $10 million of public money subject to scrutiny by a neutral panel of some sort.

So would I. Better still, they should have to answer, on the public record, every public objection to their plans.

[stumpjumper]

Thank you Aidan. That's very interesting. I suggest that as PPP's have matured from the early BOOT schemes and similar, ways have been found of actually leaving the risk with the public sector, evidenced by a few notable PPP failures such as the Sydney tunnel projects - not directly comparable because of their toll element, but still indicative. In the worst cases, the construction company simply winds up - leaving the debt with the public.

PPP's are not all against the community interest , of course, but a lot are. Henry Ergas has written extensively on the good and bad of PPP's:

It has become standard practice for Australian governments - and this holds true for the Commonwealth's Infrastructure Australia - to hide from the public the detailed information that would allow any assessment to be made of large infrastructure contracts.

Nowhere is the trend more pronounced than with respect to so-called public-private partnerships, projects in which private parties take responsibility for financing, constructing and operating public-use infrastructure, in exchange for the right to receive user fees and charges. [or interest - my addition]

The crucial issues are whether the projects are worth doing and whether the concession contract provides the project outcomes at least cost to the community.

These quotes are from http://www.theaustralian.com.au/news/op ... 5792583411

Better still, they should have to answer, on the public record, every public objection to their plans.

With the possible exception of some of Adelaide Now's more obscure experts...

[ChrisRT]

So would I. Better still, they should have to answer, on the public record, every public objection to their plans. [emphasis added]

Aidan if the government was required to respond to every single objection to every decision it made nothing would ever get done. The whole business of governing would grind to a halt. Businesses would become frustrated by inaction and ultimately close or leave the state.

We have elections for candidates to make their cases to the public and let the people decide.

Furthermore, forcing the government to 'respond' to every objection ultimately wouldn't achieve very much too. They could simply say 'you're wrong' in a nice way and proceed unabated with whatever it is they're planning. Net effect - less time spent getting things done and more time spent answer questions, releasing statements, etc. etc.

[stumpjumper]

Fair point about getting things done, ChrisRT, but on the other hand, bringing the Government to account only every four years isn't acceptable either.

Perhaps the answer is to strengthen the existing safeguards against runaway costs and 'inappropriate practices'. If not much information can be extracted from the Government in parliament, then the various standing committees, especially the Public Works Committee are supposed to provide adequate warning of anything untoward.

Unfortunately, the Public Works Committee is, like the other committees, subject to a few unhelpful constraints: the Government can prevent a project from being considered by the committee (this is the case with the 'private' Adelaide Oval redevelopment and with the Railyards RAH development despite the huge expenditure of taxpayers' funds); the committee is chaired by a Government MP and has a dominant membership of Government MPs; the committee can readily go in camera excluding observers and making its deliberations secret.

[Aidan]

So would I. Better still, they should have to answer, on the public record, every public objection to their plans. [emphasis added]

Aidan if the government was required to respond to every single objection to every decision it made nothing would ever get done. The whole business of governing would grind to a halt. Businesses would become frustrated by inaction and ultimately close or leave the state.

How much business is here because of direct government intervention? Businesses are more likely to be here because of our workforce, our infrastructure and our minerals - and mining typically requires extensive public consultation already.

We have elections for candidates to make their cases to the public and let the people decide.

But why should we have to put up with their insane policies just to get their sensible policies? And when both major parties advocate stupid policies like cutting land tax, why shouldn't they have to justify their actions to those who understand Ricardo's theory of land rent?

Furthermore, forcing the government to 'respond' to every objection ultimately wouldn't achieve very much too. They could simply say 'you're wrong' in a nice way and proceed unabated with whatever it is they're planning.

In some cases that really would be an appropriate response - for instance, when the government was accused of building a tram to nowhere, it would've been entirely appropriate. But not every issue is so clear cut, and MPs are more likely to give their decisions a lot more thought when they have to justify them.

Net effect - less time spent getting things done and more time spent answer questions, releasing statements, etc. etc.

You seem to have a very positive view of politicians - always doing good things for our state! But their track record suggests they're also likely to do things that are bad for our state, albeit unintentionally. I think Mike Rann's been quite a good premier because he's done relatively little damage. But his plan to unnecessarily spend billions of dollars to relocate a hospital to a less effective location threatens his good record.

[Benski81]

And when both major parties advocate stupid policies like cutting land tax

Aidan, why do you think cutting land tax is a stupid policy?

I'm asking because I genuinely want to know and I acknowldege this thread may not be the place for it.

[Aidan]

Aidan, why do you think cutting land tax is a stupid policy?

I'm asking because I genuinely want to know and I acknowldege this thread may not be the place for it.

Because it doesn't help productive business at all. The cost of leasing land is market driven - the owners will always charge as much as the market will support. If land tax goes down, they'll have no reason to reduce the leasing costs, and they'll pocket 100% of the savings.

The people who it benefits most are those who've already made a lot of money from land speculation. The Liberals seem to want to give them a tax cut because some of them are self funded retirees - but I'm sure there are much more cost effective ways of helping self funded retirees!

There would also be a slight benefit to businesses that buy their land rather than lease it - but that benefit would be very limited firstly because it would make the land cost more to buy in the first place, and secondly because cutting this tax prevents the government from making equivalent cuts to other taxes.

Judging by a letter from Kevin Foley, I think Labor know this but also knew that cutting it would be very popular with people who don't understand the economic implications, so they cynically chose to match the Libs' promise instead of trying to educate the public.

If you want to continue this discussion, please do so on the State Election 2010 thread.

[Benski81]

I just saw on Rann's twitter something about the AFR exposing Liberal costings for the hospital rebuild as political spin to which they've admitted. Does anyone have the article or know more about this? This is all I could get from the website:

SA Libs admit hospital funds ‘spin’
PUBLISHED : 19 Mar 2010 01:05:08 | UPDATED: 19 Mar 2010 03:00:43 PUBLISHED: 19 Mar 2010 01:05:08 PRINT EDITION: 19 Mar 2010
email
print -font +font
The release of election promise costings in South Australia has sparked a brawl over a $442 million highway and prompted a startling admission from the opposition that its position on a major hospital redevelopment is little more than spin.

[rhino]

Look here: http://www.sensational-adelaide.com/for ... 138#p75138

[Port Adelaide Fan]

Final proposals in for new RAH

TWO proposals to build the new $1.7 billion Royal Adelaide Hospital have been submitted to experts for further evaluation.

Two consortiums - Torrens Health Partnership and SA Health Partners - have worked with the State Government over the past six months to develop their proposals, which have now been submitted.

These bids will now be evaluated by experts from Treasury, Crown Law and the Health Department including senior doctors, nurses and allied health staff.

The preferred bidder will be selected later this year and construction will begin soon after and expected to be completed in 2016.

more: http://www.adelaidenow.com.au/final-pro ... 5869708431

[crawf]

I would say the design of the new RAH would have change

[skyliner]

So would I. Can't get over how much of the parklands the first proposal covered as well as it being two or three levels as indicated from render appearances.

ADELAIDE - TOWARDS A GREATER CITY SKYLINE

[Port Adelaide Fan]

Final RAH designs ready

FINAL designs for the new Royal Adelaide Hospital will be presented to the State Government tomorrow.

Premier Mike Rann today told Parliament the two leading bidders for the contract had finalised their proposals and would submit their designs for approval over two days, beginning Wednesday.

The proposals will then be evaluated by a team including SA Health, the Treasury, doctors, nurses and hospital staff.

The preferred bidder will be selected later this year, and construction is due to begin early next year.

"The presentation of these two proposals is a major step forward in the development of the hospital and a very exciting milestone in this massive project," Mr Rann said.

"Through the Private Partnership Process being used to build the hospital, an intensive competitive process is under way, which will mean South Australians get the best hospital built for the best possible price.

"South Australians will get a brand new state-of-the-art hospital with much greater capacity."

The two leading consortia are Torrens Health Partnership and SA Health Partnership.

The new hospital will have 120 extra beds, five more theatres and a larger emergency department, Mr Rann said.

http://www.adelaidenow.com.au/final-rah ... 5871197557

[flavze]

Didn't the initial plan for the new hospital have less beds than the RAH? or have i got my wires crossed?

I have warmed alot more to the new hospital than when initially proposed, as long as it doesn't screw the state finacially i haven't got alot against it any more with it being substantially bigger than the RAH. Hopefully it also has room/plans to allow it to be expanded at a later date to cater for a growing population.

[Stubbo]

From memory, the original issue was that a significant percentage of the 'new beds' were for day procedures and therefore not a technical increase in capacity for ongoing patients or overnight / multiple day stays.

Not sure if that has been changed or not.