Clear and sound advice was provided to government during the decision-making process to commit to and invest in the project. The business case was comprehensive and incorporated the key information and analysis required by Partnerships Victoria and other guidelines. It included transparent analysis of options, including procurement options, as well as risk and project management issues.
Service planning for the new RCH used relevant data available at the time, including the results of a model used by DHS to develop service demand projections. However, we were unable to conclude on how well that data was applied due to:
• DHS being unable to demonstrate a comprehensive understanding of the development, operation and internal logic of the forecasting model
• an absence of evidence to confirm how advice from clinicians was taken into account to enable appropriate adjustments to be made to forecasts of admitted patient activity.
The lack of a defined 'network response' for paediatric care in Victoria, and a lack of clarity about RCH's role in that network-together with delays in developing models of care for the new RCH-added to the complexity of the service planning process for the new hospital. However, this did not invalidate the planning outputs.
A competitive tender process was conducted to select the preferred consortium to deliver the new RCH project. The evaluation process at both the expressions of interest and project brief stage was well documented. The decisions were justifiable on the basis of the requirements and the selection criteria in the project brief making the process fair to all bidding parties. Relevant government requirements and guidelines were observed during the procurement process.
The state's involvement in the design and construction phase of the project is being well managed. The governance arrangements for the project provide an effective framework for communication with the relevant parties as well as assessment, monitoring and actioning of emerging issues and risks.
The project agreement includes a comprehensive performance monitoring and reporting regime for the operating phase of the new hospital. However, DHS needs to take steps to progress development of the project contract administration manual and further enhance project management documentation in place for the state's project team. Timely action on these matters will provide further assurance that the state's risks around this project are being managed effectively.
The recent downturn in global financial markets has not had any direct adverse impact on the project financing arrangements. All project finance remains in place and the state is adequately monitoring this issue.