Over the last decade, previous governments have commissioned planning studies to replace the existing Royal Women's Hospital in Carlton with a new clinical facility for Victorian women and their babies.
The newly-built hospital in Parkville has been procured by contracting the private sector, under the Partnerships Victoria framework, to design, build, finance and maintain the facility for 25 years from mid-June 2008 onwards.
The planning and business case for the new facility was sound, and the procurement exercise was conducted in compliance with the rules, policy and guidance set by the Government of Victoria. The government was provided with detailed analyses of both the options to replace the existing hospital, and the procurement strategies to achieve those options.
Although the difference between the final private sector bid and the state's own cost estimate was very small, there is potential for other efficiencies and value to be generated by this Public Private Partnership over the life of the contract.
A functional and flexible design, improved aesthetics, superior environmental performance, documented performance levels for non-clinical service delivery, and certainty of funding to properly maintain the new hospital, are examples of some of the positive outputs provided by this arrangement.
I encourage the Department of Human Services to complete the development of its contract management systems and processes for the new hospital. This will give greater assurance that the state will receive expected levels of service over the life of this lengthy contract with the private sector.
DR PETER FROST
Acting Auditor-General
25 June, 2008