Report No. 37, May 1997 Redevelopment of the Princess Alexandra Hospital — interim report LEGISLATIVE ASSEMBLY OF QUEENSLAND PUBLIC WORKS COMMITTEE REDEVELOPMENT OF THE PRINCESS ALEXANDRA HOSPITAL — INTERIM REPORT Report No. 37 PUBLIC WORKS COMMITTEE MEMBERS Mr Len Stephan MLA (Chairman) Member for Gympie Mr Bill D’Arcy MLA (Deputy Chairman) Member for Woodridge Mr Graham Healy MLA Member for Toowoomba North Mr Pat Purcell MLA Member for Bulimba Mr Ted Radke MLA Member for Greenslopes Hon Geoff Smith MLA Member for Townsville SECRETARIAT Mr Les Dunn Research Director Ms Alison Wishart Research Officer Ms Maureen Barnes Executive Assistant CONTENTS Page PREFACE ............................................................................................................................ i RECOMMENDATIONS.................................................................................................... ii INTRODUCTION................................................................................................................1 THE COMMITTEE ...................................................................................................1 SCOPE OF INQUIRY................................................................................................2 SUBMISSIONS, INSPECTION AND HEARINGS ...................................................2 RESPONSIBILITY OF MINISTERS.........................................................................3 THE PROJECT ...................................................................................................................4 PROJECT PLANNING..............................................................................................5 TERMS OF REFERENCE..................................................................................................7 1. THE PURPOSE OF THE WORK AND THE SUITABILITY OF THE WORK FOR THE PURPOSE; AND 9. THE SUITABILITY OF THE WORK IN MEETING THE NEEDS AND IN ACHIEVING THE STATED PURPOSE OF THE WORK ...................................................................................................7 2. THE NECESSITY FOR AND ADVISABILITY FOR THE WORK.....................7 3. THE VALUE FOR MONEY ACHIEVED, OR LIKELY TO BE ACHIEVED BY THE WORK...................................................................................................8 4. THE CONCURRENT COSTS OR ESTIMATES OF CONCURRENT COSTS OF THE WORK ...................................................................................................8 Project budget.................................................................................................8 Project time frame...........................................................................................9 5. THE PRESENT AND PROSPECTIVE PUBLIC VALUE FOR THE WORK, INCLUDING THE IMPACT OF THE WORK ON THE COMMUNITY, ECONOMY AND ENVIRONMENT .................................................................10 6. PROCUREMENT METHODS FOR THE WORK .............................................11 7. THE BALANCE OF PUBLIC AND PRIVATE SECTOR INVOLVEMENT FOR THE WORK...............................................................................................13 8. THE PERFORMANCE OF THE CONSTRUCTING AUTHORITY, CONSULTANTS AND CONTRACTORS FOR THE WORK............................13 APPENDIX A — CALL FOR SUBMISSIONS................................................................14 APPENDIX B — LIST OF SUBMISSIONS RECEIVED................................................15 APPENDIX C — LIST OF WITNESSES.........................................................................16 Preface Redevelopment of the Princess Alexandra Hospital PREFACE In an attempt to identify problems before they become a major concern the Public Works Committee intends to look at projects before construction begins. It was for this reason the committee resolved to look at the redevelopment of the Princess Alexandra Hospital. Considering the project is now worth $300 million it is as well the committee did. The committee supports the project to redevelop the Princess Alexandra Hospital. The current hospital buildings are not up to the standard required for a modern hospital, and as the buildings are unsuitable they result in the hospital costing more to run than it should. However, the processes adopted by Queensland Health to manage the process concerns the committee. The initial design competition, the lack of a prepared project definition plan before commencement of design, the budget blow-out and the consultancy payments to Project Services, Department of Public Works and Housing, were issues which caused concern during the inquiry. The committee believes there is room for improvement in the way Queensland Health is managing the project. As the project is in the early states of development the committee, in its report, has stopped short of outright criticism of the Department of Health. However, in order to assure itself that Queensland Health is managing the project properly the committee will review the project on a regular basis. Consequently, this is an interim report. In the future the committee will table in parliament reports of its regular reviews of the project. In this report the committee makes recommendations which it believes will improve Queensland Health’s planning process for major capital works. The committee also makes recommendations aimed at clearly setting out the role of Project Services and the amount of fees paid to it by government departments. I thank my committee colleagues for their assistance during the inquiry. I also thank all those who assisted the committee during the inquiry and the secretariat staff for their efforts. Len Stephan MLA Chairman (i) Recommendations Redevelopment of the Princess Alexandra Hospital RECOMMENDATIONS The committee makes the following recommendations: RECOMMENDATION 1: (Paragraph 19) The committee recommends that Queensland Health amend its capital works project planning process to ensure that it complete project definition plans prior to starting design work. RECOMMENDATION 2: (Paragraph 33) The committee recommends that for future projects Queensland Health set a project budget prior to commencement of planning for the project and that planning take place to suit that budget. RECOMMENDATION 3: (Paragraph 37) The committee recommends that for future construction projects Queensland Health set a timetable for completing the project and that planning take place to suit that timetable. RECOMMENDATION 4: (Paragraph 49) The committee recommends that the Public Accounts Committee consider to undertake an inquiry into: (a) the role of Project Services as a business unit of the Department of Public Works and Housing (b) fees charged to government agencies by Project Services. RECOMMENDATION 5: (Paragraph 49) The committee recommends: (a) that Queensland Health put out to tender immediately the services currently provided by Project Services on the Princess Alexandra Hospital project (b) that Queensland Health allow Project Services to compete for the work on a competitive basis. (ii) Introduction Redevelopment of the Princess Alexandra Hospital INTRODUCTION THE COMMITTEE 1. The Parliamentary Committees Act 1995 (Qld) establishes the Public Works Committee. It consists of six members of the Legislative Assembly. Both the Government and the Opposition nominate three members. The chairperson must be a government member and has a casting vote if the votes are equal (s. 4A.(1)). The all-party committee adopts a non-partisan approach to its inquiries. 2. The committee’s role is to scrutinise the government’s capital works program. This can occur at any stage from planning to completion. The committee may determine to conduct a particular inquiry, or the Legislative Assembly may refer specific works for investigation. Amendments contained in the Parliamentary Committees Legislation Amendment Act 1996 (Qld) allow the committee to consider major works conducted by Government-Owned Corporations (GOCs) (s. 20(1)(b)). 3. The committee considers a variety of matters when conducting its inquiries, many of which also form the basis of its decisions to inquire into particular areas or projects. The committee endeavours to review projects from as wide a selection of departments and other constructing authorities as is practicable, in a variety of locations throughout Queensland, of differing cost and scale, and at various stages of their implementation. 4. When investigating a work, the committee may consider: · the stated purpose of the work and the apparent suitability of the work for the purpose · the necessity for, and the advisability of, the work · value for money achieved, or likely to be achieved, by the work · revenue produced by, and recurrent costs of, the work or estimates of revenue and costs for the work · the present and prospective public value of the work, including consideration of the impact of the work on the community, economy and environment · procurement methods for the work · the balance of public and private sector involvement in the work · the performance of - · the construction authority for the work and · the consultants and contractors for the work with particular regard to the time taken for finishing the work and the cost and quality of it and · the actual suitability of the work in meeting the needs and in achieving the stated purpose of the work (s. 20(2)). 1 Introduction Redevelopment of the Princess Alexandra Hospital 5. The committee considers that when investigating public works, it is essential to listen