Sensational-Adelaide.com

mattblack wrote:
I would garantee that liberal staffers would have been on top of that poll all day to turn those figures. I would give those polls no cred at all.

The Advertiser polls aren't exactly scrutineered, mattblack, but you have to give them some credibility at least as indicators.

Okay, I cant help myself, Im going to have to ask how you can spend $700m and get the same infrastructure as $10 Billion ................ This should be entertaining.

Bear in mind that the present RAH is freehold and is ten years into a refurbishment program.

The total cost including interest paid under the PPP of the new hospital in current dollars over 34 years is about $10 billion. This figure includes paying 34 years' worth of Spotless running the hospital (a cost which we would pay approximately anyway) + profit to Spotless + 15% return to Macquarie's capital investors + profit to Macquarie.

The last three figures are not offsets and we would not be paying them if we spent $700 million finishing the renovation of the old RAH. If the government were prepared to have the cost of the new RAH on its balance sheet instead of off it, that is if it simply borrowed money and built the project through DTEI, it would cost us about 6% to borrow the money instead of 15% + to do it off the balance sheet through Macquarie. I don't find that particularly entertaining.

It should be noted that while investment funds can be raised (ie Macquarie's role) for a greenfield hospital development, it's very hard to raise private funds for a refurbishment due to the risk of unknown costs. However, almost all the refurbishment part of the RAH project has been done at public cost (during the last 7 years of the Rann government. All that's left to do is $700 million of new patient accommodation which would be built on a greenfield site created within the existing hospital by demolishing existing buildings.

The objections of the 'Finish the RAH Refurb' or 'Save The RAH' lobby headed by Dr Jim Katsaros are at least threefold: 1. The fact that the hospital is over 50% renewed. 2. The very high cost of the 'New RAH' which the next few generations will pay. 2. 'It's in the wrong place' as Katsaros says. Separation by 1.5 kilometres and a half hour travel time from the Medical School, the IMVS, Hanson Centre and Dental School will create unnecessary costs which have not been thought through.

stumpjumper wrote:The Advertiser polls aren't exactly scrutineered, mattblack, but you have to give them some credibility at least as indicators.

Absolutely not. News website polls aren't worth the electrons they're printed on. All they tell you is the opinion of people who clicked the headline and they're never presented in neutral tone. This is year 12 maths stuff.

Also, it's hard to critique the contracts when you're not an accountant and working of part details. If the interest payments are actually 15%, as you say without citing a source, it may be because it's a fixed price contract and the consortium are taking on the risk of absorbing any cost blow-outs throughout the project. I have NFI, but I'm just speculating, just like you.

Finally, please stfu about Save the RAH. The decision has been made. Reading the same stuff over and over is just tiresome.

In all of the information that's been posted by the government and also in the media, there's little or no mention of who the architects are. This is one of the few bits of info out there:

http://www.architectureanddesign.com.au ... 90993.aspx

Aurora is providing architecture for the public private partnership project, with landscape architecture by Swanbury Penglase and urban planning by Urban Regional Planning Solutions.

Interesting that it's not a South Australian practice doing the design — Aurora are from Brisbane. I think Grieve Gillett did the inital planning/design work?

AtD wrote:

stumpjumper wrote:
Finally, please stfu about Save the RAH. The decision has been made. Reading the same stuff over and over is just tiresome.

This.

...This?

It's over my head.

AtD wrote:
If the interest payments are actually 15%, as you say without citing a source

The source is Macquarie’s prospectus for the NRAH, produced in parliament on 5/5/11 and aimed at attracting investment in the new hospital. The prospectus offers to private investors a return on investment in the new RAH of 15% per annum.

The prospectus gives the building cost of the new hospital as $2.73 billion, with an average annual payment by the government to the managing consortium of $323 million pa for approximately 30 years. The total cost at today’s prices is about $11 billion. These figures are now public.

The construction consortium is HYLC Joint Venture – Hansen Yuncken and Leighton Construction.

The source of the actual design isn’t easy to find. I’m an architect and all I’ve been able to find is that Aurora, an Australian firm, is described as the designer, but Aurora is primarily a project manager with architectural expertise. However Ove Arup & Partners is listed as project manager.

The full nRAH team is:

architectural - Aurora
commercial and financial - Ernst & Young
engineering - Emow Lai and Arup Acoustics
equipment - Redback Health Services
facilities management - Milliken Berson Madden
health planning - Aurora/Durrow
information, communication and technology (ICT) - SA Health ICT Service with Umow Lai
international architectural - MAAP
international health planning - Durrow
landscape architect - Swanbury Penglase
legal - CSO with Clayton Utz
office spatial reform - DEGW
project management - Arup
probity advisor - CSO (Internal Legal) Pitcher Partners (External)
quantity surveying - Rider Levett Bucknall
security risk assessment - Sinclair Knight Mertz
technology - Sg2
transport - Parsons Brinckerhoff
urban planning - Urban Regional Planning Solutions

As discussed, private investors (especially institutional investors who put a high value on certainty) are not very interested in refurbishment projects.

stumpjumper wrote:The source is Macquarie’s prospectus for the NRAH, produced in parliament on 5/5/11 and aimed at attracting investment in the new hospital. The prospectus offers to private investors a return on investment in the new RAH of 15% per annum.

Then 15% is the return indicated by Macquarie to their investors, not interest paid by the state to Macquarie. I would hazard a guess that this private equity would be either a small source of funds, or, the first to get wiped out if costs increase.

crawf wrote:

AtD wrote:

stumpjumper wrote:
Finally, please stfu about Save the RAH. The decision has been made. Reading the same stuff over and over is just tiresome.

This.

THIS x 2

You might want to do some more research. The team below is not correct. DesignInc and Silver Thomas Handly have a JV and are working as Architects for HY and LC

stumpjumper wrote:The source of the actual design isn’t easy to find. I’m an architect and all I’ve been able to find is that Aurora, an Australian firm, is described as the designer, but Aurora is primarily a project manager with architectural expertise. However Ove Arup & Partners is listed as project manager.

The full nRAH team is:

architectural - Aurora
commercial and financial - Ernst & Young
engineering - Emow Lai and Arup Acoustics
equipment - Redback Health Services
facilities management - Milliken Berson Madden
health planning - Aurora/Durrow
information, communication and technology (ICT) - SA Health ICT Service with Umow Lai
international architectural - MAAP
international health planning - Durrow
landscape architect - Swanbury Penglase
legal - CSO with Clayton Utz
office spatial reform - DEGW
project management - Arup
probity advisor - CSO (Internal Legal) Pitcher Partners (External)
quantity surveying - Rider Levett Bucknall
security risk assessment - Sinclair Knight Mertz
technology - Sg2
transport - Parsons Brinckerhoff
urban planning - Urban Regional Planning Solutions

As discussed, private investors (especially institutional investors who put a high value on certainty) are not very interested in refurbishment projects.

Thanks Tim. I'd heard of DesignInc's involvement but not Silver 'Thomas Hanley's.

tbh as this goes ahead i expect Adelaide Now feedback on various Advertiser articles to break the internet.

Righto, I'l start then.

Here's an exercise for all the budding developers who post here.

Create two columns on a sheet of paper - one for costs of the new RAH and one for the costs of continuing the renovation of the existing one:

(Hmm. The columns haven't made the cut. You can read the two sets of figures though).

Costs of new RAH Costs of renovation existing RAH

Building cost (per Macquarie) $2.73 billion for 700 beds $700 million for 700 beds

Equipment and furniture $500 million n/a

Soil remediation between $40 million and $700 million* n/a

DAC requirements $163 million n/a

Write off of existing RAH asset $1 billion n/a

Cost using lowest figures $4.43 billion $700 million

Paid for by $257 million pa in repayments for 30 years from budget

Total cost $7.11 billion $700 million (or borrowings at say 6%)
plus annual running cost


Your client is the SA taxpayer. As an expert in assessing developments, you must choose which option is best for your client.

* Quotes have varied and are not firmed up yet. I kid you not: $40 mill to $700 mill - I double checked it!

Factors for consideration:
- Treasurer Foley lost nearly $3 billion of our funds in the GFC.
- There is a 'just discovered' additional $600 million deficit in the 2011 budget.
- We've just given away at least $535 million to SACA and SANFL.
- Many world standard hospitals around the globe have conducted in-situ renovations economically and with little disruption, saving billions.

I suspect SA will end up like the Bogan family with their 90cm plasma on hire purchase but kids with no shoes - we'll have a shiny billion dollar hospital but crap roads, high taxes and every request for school funding etc will be turned down.

Of course it's going to look cheaper to upgrade if you use the same aging equipment, leave the pollution in the ground in the rail yards, pretend the existing site and structures are of no value, don't get development approval for the work (lol), include 30 years operating costs (double lol) in the build option but not the refurb option and totally ignore operating outcome.

I think I speak for most of us: we are sick of this debate, it's getting built. Further posts trying to argue the past will be deleted.

I disagree with including soil remediation costs in the construction of the hospital anyway. No matter what happens on the site it is gonna require fixing up the mess left behind by the train yards, so should be counted independently as part of that.

AtD wrote:I think I speak for most of us: we are sick of this debate, it's getting built. Further posts trying to argue the past will be deleted.

AtD; that is a gross infringement on our right to freedom of speech.

AtD wrote:Further posts trying to argue the past will be deleted.