Materials, Labour Shortages a $1bn Challenge for Healthcare Precinct


The $5.8-billion Westmead precinct will become one of the largest health, education and research precincts in Australia.

But costing out the long-tail project is no easy feat as materials and labour shortages bite into bottom lines.

The NSW government, universities and the private sector have committed more than $3 billion to the precinct that will span 75 hectares.

More than 400,000sq m of new projects, including four hospitals, four medical research institutes and the largest research intensive pathology service in New South Wales, have been slated for the site.

Altus Group director of cost management Alan Fox, who speak at The Urban Developer’s one-day virtual summit on healthcare property, has been involved in the Westmead Hospital redevelopment from its inception, and said it was a “once-in-a-lifetime” project.

“It’s very hard in terms of cost management, there are a lot of moving parts, and that was probably one of the big lessons learned,” Fox said.

“At the peak we had six different pieces of work at various stages around the precinct.

“We’ve been focused on healthcare for the past 20 years but this is the most significant project we have been involved with.

“It’s one of those projects you only see once in a lifetime … this really sets us apart from other quantity surveying firms, to win a project like that.”

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Hear from industry experts at The Urban Developer’s one-day virtual summit on the healthcare property sector. Click here.

Fox said nailing down costings was difficult with a long-tail project of this scale, but spending time on budgets early on had returned good results for the Altus Group’s team of six staff working solely on the health precinct project.

“A lot of the hard work is establishing budgets at the start for such a long-term project,” he said.

“We’ve really grown in the public healthcare sector, and this project has informed our work going forward.

“We’ve also been engaged as the cost managers for the children’s hospital, which we’re starting to work on early next year ... it will be a $620-million project.”

Fox said the materials and labour shortages were being weighed into costings for the children’s hospital redevelopment project, which presented more risk than the earlier projects within the precinct.

A new central acute services building opened earlier this year, three months ahead of schedule.

The 14-storey building integrates the Westmead Hospital and The Children’s Hospital to include new operating theatres, surgical suites, pharmacy and imaging.

The state government’s vision is for Westmead to become the nation’s premier health and innovation district with leading researchers, entrepreneurs, health workers and students.

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