The $600 million redevelopment of Christchurch and Burwood hospitals may be partly funded through private investment.
Health Minister Tony Ryall gave the go-ahead yesterday for the Canterbury District Health Board to develop a business case for the stage-one redevelopment of the city's hospitals.
The project involves rebuilding most of the clinical wards at Christchurch Hospital, including a new 465-bed acute services wing. It also includes a new specialist centre for older people's services at Burwood Hospital, with 264 new beds.
As part of the business case, Ryall has asked the board to work with the National Health Board to "sound out" what opportunities exist for a public-private partnership to build the new facilities.
"This could include design, build and management of buildings, and some non-clinical support services, while the DHB maintains full responsibility for delivering public health services," he said.
The idea has alarmed health unions and one board member, and was described as "an unwelcome Christmas surprise" by Labour health spokeswoman Maryan Street.
Ryall said that in the current economic situation, the Government expected health boards to "look outside the square when it comes to achieving value for money in capital projects".
"There is already a wide range of private involvement in the public health service, and similar public private infrastructure partnerships have worked well overseas," he said.
Acting board chief executive Mary Gordon said the board would explore public-private options while forming its business case in the next six months.
"What the minister is saying is if there are opportunities and it could provide us with good value and good use of public money, then we should look at it. It's perfectly reasonable. He's not committing us to: `That is the way it has to go'."
She said the go-ahead was "fantastic news and something really positive to end this year after all the challenges we've had in the last 18 months".
"[The announcement] is code for partial or full privatisation. It is wrong to use the devastation of the Christchurch earthquakes to pursue a privatisation agenda and then to slip the announcement through on the eve of Christmas," he said.
Public Service Association national secretary Richard Wagstaff said public-private partnerships overseas had proved to be "wasteful, costly, complex and a poor use of public money".
The city could not future-proof its health infrastructure with a PPP, he said.
Board member Andrew Dickerson said the private sector should not play a role in the redevelopment.
"In 25 years of working at a number of hospitals in New Zealand, I have come to appreciate that public hospitals are large, complex, interdependent organisations ... I do not believe that you can break off bits, flick them off to the private sector and expect the hospital to still function as a unified team," he said.
"While I have no problem with public-private partnerships in helping fund new hospital facilities, I am personally opposed to the partial privatisation of any district health board services."
However, he was "pleased to see some progress" being made because hospital facilities would not cope with future demand.
Another board member, David Morrell, said the announcement was the "best Christmas present ever".
"It's a huge investment. I think it's critical for the development of health services in Canterbury, and not just hospital services, but other health services too," he said. "This redevelopment was planned before the earthquakes, but it will really help us to recover from the effects the earthquakes have had."
Christchurch Central National MP Nicky Wagner said the February quake had added a huge sense of urgency to the project. She welcomed "innovative" funding options.
"I think that a public-private partnership is just one option, but Christchurch is open to new, innovative ways of funding projects," she said.
The board hoped the stage-one rebuild would be completed by 2016. Repairs of existing buildings would continue in the meantime. Stage two of the redevelopment, involving more work at Christchurch Hospital, has yet to be approved.
The union representing doctors said yesterday that it had "grave concerns over the privatisation threat" to Christchurch's hospitals. Association of Salaried Medical Specialists executive director Ian Powell said the last thing public hospitals needed was the "introduction of fragmentation that this sort of privatisation would create".
"The announcement is code for partial or full privatisation. It is wrong to use the devastation of the Christchurch earthquakes to pursue a privatisation agenda and then to slip the announcement through on the eve of Christmas," he said.
Public Service Association national secretary Richard Wagstaff said public-private partnerships overseas had proved to be "wasteful, costly, complex and a poor use of public money".
The city could not future-proof its health infrastructure with a PPP, he said.
Board member Andrew Dickerson said the private sector should not play a role in the redevelopment.
"In 25 years of working at a number of hospitals in New Zealand, I have come to appreciate that public hospitals are large, complex, interdependent organisations ... I do not believe that you can break off bits, flick them off to the private sector and expect the hospital to still function as a unified team," he said.
"While I have no problem with public-private partnerships in helping fund new hospital facilities, I am personally opposed to the partial privatisation of any district health board services."
However, he was "pleased to see some progress" being made because hospital facilities would not cope with future demand.
Another board member, David Morrell, said the announcement was the "best Christmas present ever".
"It's a huge investment. I think it's critical for the development of health services in Canterbury, and not just hospital services, but other health services too," he said. "This redevelopment was planned before the earthquakes, but it will really help us to recover from the effects the earthquakes have had."
Christchurch Central National MP Nicky Wagner said the February quake had added a huge sense of urgency to the project. She welcomed "innovative" funding options.
"I think that a public-private partnership is just one option, but Christchurch is open to new, innovative ways of funding projects," she said.