❓ Mr. Cook questions the Minister for Health regarding potential delays and costs associated with the Serco contract for Fiona Stanley Hospital. The Minister acknowledges risks were identified early and negotiations are underway to mitigate costs.
AnsweredQoN 216Legislative Assembly
QuestionView source ↗
FIONA STANLEY HOSPITAL — SERCO CONTRACT
216. Mr R.H. COOK to the Minister for Health:
I refer to the $4.3 billion contract for services for Fiona
Stanley Hospital to be provided by Serco and the millions of dollars that
taxpayers are now exposed to subject to that contract.
(1) On what
date was the minister first advised that the issues surrounding the
commissioning of the new hospital in the areas of IT, administration and
staffing would affect the opening date of the hospital?
(2) Does the
minister guarantee that all services will be in place in a fully operational
hospital by 1 April 2015?
216. Mr R.H. COOK to the Minister for Health:
I refer to the $4.3 billion contract for services for Fiona
Stanley Hospital to be provided by Serco and the millions of dollars that
taxpayers are now exposed to subject to that contract.
(1) On what
date was the minister first advised that the issues surrounding the
commissioning of the new hospital in the areas of IT, administration and
staffing would affect the opening date of the hospital?
(2) Does the
minister guarantee that all services will be in place in a fully operational
hospital by 1 April 2015?
AnswerView source ↗
(1)–(2)
I would like to answer those questions in reverse order, if I may, to ensure I
do not forget. Yes, the government has committed to the full suite of services
being in place by April 2015.
Mr R.H. Cook : Will
you tell me the truth this time?
The
SPEAKER : Member for Kwinana, let the minister answer and then you
can ask a supplementary question.
Mr
R.H. Cook : I am very happy to.
Dr
K.D. HAMES : With regards to the contract itself, the risks associated with
the opening date for the hospital were identified in the very early stages by
Treasury in comments in the budget papers , and of course the Auditor General's
report identified IT as a risk; it has always been well recognised that to put
together the computer systems that are required to manage a hospital of this
nature is a massive task. It is a $2 billion hospital. It will be one of the
best hospitals in not only Australia but also the world. Putting together a
package of computer systems to run what will be virtually a paperless hospital—I
say virtually because it will not be 100 per cent paperless—is a huge
task. The risk was identified. Members should remember that when we came to
government, our original commitment was for the hospital to be open in 2014.
The later date of April 2015 was set as part of the contract development with
Serco, but within that contract was a provision that allowed for delays. It was
put in there for the specific reason that delays can occur. Computers were seen
as a risk, and also we had no idea whether the building of the hospital itself
would be on time and on budget. As it turns out, it is, but that mitigating
risk was put there. It requires Serco to mitigate the cost of any delays. That
means that instead of hiring all the staff ready for a 1 April opening, it will
delay the employment of staff and open at a later date. Serco has to mitigate that.
We now, as a result of that —
Mr M. McGowan : So,
what's the loss?
Dr K.D. HAMES : We
do not know what the cost is going to be.
Mr B.S. Wyatt : So
the remainder of their loss is passed onto the state; is that what you're
saying?
Dr
K.D. HAMES : We do not know yet what the cost is going to be. We are
starting negotiations now with Serco, and the cost may be zero; it will depend
on the result.
Several members interjected.
Dr
K.D. HAMES : It is possible. I suspect it is more likely that there will be
some cost, but nowhere near, I might add, the cost put forward in the paper
that suggested a figure of $250 000 to $400 000 a day. That related to a
totally different question unrelated to the issue at hand. That figure was just
not relevant to the argument before us.
We are getting on with that process; it is very complex. We
will not open that hospital until it is safe to put patients in there. That is
the bottom line. We will not open it until we can put a patient in there and
make sure that their journey through the hospital is safe. We think the public
will understand that this is a mammoth hospital and that the development of the
processes is extremely complex, and we have a small delay in the context of a
building that was going to be ready in 2010, the opposition might recall, under
a government of members opposite.
I would like to answer those questions in reverse order, if I may, to ensure I
do not forget. Yes, the government has committed to the full suite of services
being in place by April 2015.
Mr R.H. Cook : Will
you tell me the truth this time?
The
SPEAKER : Member for Kwinana, let the minister answer and then you
can ask a supplementary question.
Mr
R.H. Cook : I am very happy to.
Dr
K.D. HAMES : With regards to the contract itself, the risks associated with
the opening date for the hospital were identified in the very early stages by
Treasury in comments in the budget papers , and of course the Auditor General's
report identified IT as a risk; it has always been well recognised that to put
together the computer systems that are required to manage a hospital of this
nature is a massive task. It is a $2 billion hospital. It will be one of the
best hospitals in not only Australia but also the world. Putting together a
package of computer systems to run what will be virtually a paperless hospital—I
say virtually because it will not be 100 per cent paperless—is a huge
task. The risk was identified. Members should remember that when we came to
government, our original commitment was for the hospital to be open in 2014.
The later date of April 2015 was set as part of the contract development with
Serco, but within that contract was a provision that allowed for delays. It was
put in there for the specific reason that delays can occur. Computers were seen
as a risk, and also we had no idea whether the building of the hospital itself
would be on time and on budget. As it turns out, it is, but that mitigating
risk was put there. It requires Serco to mitigate the cost of any delays. That
means that instead of hiring all the staff ready for a 1 April opening, it will
delay the employment of staff and open at a later date. Serco has to mitigate that.
We now, as a result of that —
Mr M. McGowan : So,
what's the loss?
Dr K.D. HAMES : We
do not know what the cost is going to be.
Mr B.S. Wyatt : So
the remainder of their loss is passed onto the state; is that what you're
saying?
Dr
K.D. HAMES : We do not know yet what the cost is going to be. We are
starting negotiations now with Serco, and the cost may be zero; it will depend
on the result.
Several members interjected.
Dr
K.D. HAMES : It is possible. I suspect it is more likely that there will be
some cost, but nowhere near, I might add, the cost put forward in the paper
that suggested a figure of $250 000 to $400 000 a day. That related to a
totally different question unrelated to the issue at hand. That figure was just
not relevant to the argument before us.
We are getting on with that process; it is very complex. We
will not open that hospital until it is safe to put patients in there. That is
the bottom line. We will not open it until we can put a patient in there and
make sure that their journey through the hospital is safe. We think the public
will understand that this is a mammoth hospital and that the development of the
processes is extremely complex, and we have a small delay in the context of a
building that was going to be ready in 2010, the opposition might recall, under
a government of members opposite.
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