Cook Government facing eye-watering $400 million health budget blowout for Peel Health Campus redevelopment

The State is facing a potential $400 million health budget blowout, with the Government told that redevelopment of Peel Health Campus in Mandurah could cost more than three times the original quote. Documents obtained by The West Australian mark the project’s budget status as red for “off track”, and the forecast practical completion date as “to be confirmed” — five years after the major upgrade was announced. “Cost far exceeds the $152 million initially estimated in 2020,” the budget commentary states. “The 2024 Redevelopment Business Case estimated PHC redevelopment costs to be approximately $558 million.” The document flagged a request for “alternative staging and sequencing” to be considered. And it said there was a “high risk” of further “significant” program schedule delays. Health Infrastructure Minister John Carey has confirmed “further investment” will be needed for stage two of the Peel Health Campus upgrade to go ahead. He said the leaked document warning it could cost $558 million was out of date but, notably, did not say it was wrong. “This document pre-dates the significant reforms we have made to the delivery of critical infrastructure,” Mr Carey said. “The Office of Major Infrastructure Delivery has now taken oversight of the Peel Health Campus redevelopment and is re-examining future delivery of the hospital. “I have been on the record that the $152 million allocated to Peel Health Campus is delivering forward works on-site and that the Government would be making further announcements on Stage 2 works.” Mr Carey named Peel Health Campus one of the priority projects likely to get funding from a new $500 million Health Infrastructure Fund announced this week. But the Opposition claims it’s further proof the fund won’t stretch far enough. “It is now clear the $500 million spend announced this week was nothing more than the Cook Government doing its best to dress up cost overruns as new spending,” shadow health minister Libby Mettam said. “These massive blowouts happen when governments promise health infrastructure but delay delivery while prioritising spending on vanity projects. “PHC was originally promised in 2020. Some five years on, we’re not only seeing a massive budget blowout but still no clear time frame as to when this much needed expansion will actually be delivered.” On Friday, Mr Carey rejected claims Labor’s health infrastructure program — which now totals $3.7 billion over four years — had fallen behind due to Metronet getting priority. “I reject that, we need public transport infrastructure. We need housing infrastructure, and we need health infrastructure,” he said. “It’s about balancing that.” He maintained the Government could build its way out of hospital and housing crises at the same time. “Yes, the regions in particular can be tough,” he said. “The more regional and remote projects are far more difficult to get a tender. “But the advice I’m starting to get now is that there is a lot more early interest from a broader number of builders in relation to our health construction program. “And, of course, I welcome that because what that means is competition is good in terms of value for WA taxpayers.”