The costs of the project construction are being fully met by the project company during the construction phase of the project. As the project is a PPP, funding for the delivery of the facility is an agreed sum, disbursed over the life of the agreement in accordance with the payment schedule contained in the Project Agreement.
The state will commence payment of Quarterly Service Payments (QSP) when the building is commissioned. The QSP cover the build cost and the cost of delivering services. The QSP will be managed through a performance monitoring and abatement program.
Other costs associated with the project, such as enabling works and project management costs, including project contingency, are appropriately monitored and reported to government. The project is being delivered within the approved funding envelope.
Figure 5B sets out the total budget approved by government for the RWH redevelopment project costs, and actual costs as at 28 February 2008, as provided by DHS.
Figure 5B Approved budget and actual/projected costs for the RWH project
| Funding | Total approved budget $M | Actual budget at 29 May 2008 $M |
| Enabling works | 39.75 | 42.35 |
| Relocation and contingency (a) | 13.60 | 4.05 |
| Project management | 14.67 | 14.48 |
| Total project cost | 68.02 | 60.88 |
(a) Total budget includes a subsequent approval by the Minister for Health to increase the budget relating to enabling works from $39.75 million to $42.35 million, which was effected by augmenting contingency funds by $2.6 million. This increase relates to the upgrading and relocation of the existing Royal Melbourne Hospital kitchen.
Source: Victorian Auditor-General's Office, based on DHS data.
DHS has advised that projected actual costs are on target.