Following months of delays and public backlash, work on the new Dunedin hospital’s inpatient building will resume mid-year.

The Government has confirmed that construction will begin with the substructure, marking the next phase of the project.

Health Minister Simeon Brown announced the update today as part of a nationwide infrastructure plan.

Health Minister Simeon Brown. Photo / Mark Mitchell

Brown said an advance notice has been posted on the Government Electronic Tender Service, initiating the tender process for the substructure.

“An advance notice will be published ... to complete the substructure for the building, which is an important step while commercial negotiations for the main construction continue,” he said.

The substructure includes the installation of the lower slab, concreting, and plinths for base isolators – key structural features for the eventual above-ground building.

Capping of the 324 piles already in place on the site is expected to begin mid-year.

“Work continues to ensure the design of the inpatient building will deliver health services effectively for generations to come. While this continues, I look forward to seeing the physical progress of the hospital take its next steps from mid-year once the tender is awarded,” Brown said.

The inpatient site of the new Dunedin hospital, with the outpatient building in the background. Photo / Ben Tomsett

The announcement is the most tangible sign of progress since the project was paused amid escalating costs and growing public frustration.

Dunedin Mayor Jules Radich welcomed the news, describing it as a reward for the region’s collective efforts to safeguard the hospital’s future.

“This is a critical piece of health infrastructure not just for Dunedin, but for the south and the entire country,” Radich said.

“Once built, the Southern Region Tertiary Hospital will provide modern, fit-for-purpose healthcare for our communities, as well as helping train the next generation of medical specialists and ensuring resilience when disaster strikes.

“That’s why our council stood with people across the south when the future of our hospital was threatened, and watching the inpatient building rise from the ground in the heart of our city will be a tangible reward for that collective effort.”

Radich said he appreciated being given advance notice by the Health Minister.

“I’m confident our relationship with Government is in good health, and it’s pleasing to see that after listening to our concerns they’re now ready to get on with delivering for the people of the south.”

The Dunedin hospital rebuild has been mired in delays and political controversy, with tens of thousands of residents protesting last year over proposed cutbacks and concerns the facility would be underbuilt.

Construction on the inpatient building was paused last year following an announcement from former Health Minister Dr Shane Reti and Infrastructure Minister Chris Bishop, sparking fierce backlash from local residents and health professionals.

Around 35,000 people gathered in Dunedin to protest against cuts to the new hospital. Photo / Ben Tomsett

The Dunedin City Council and the Save Our Southern Hospital campaign have consistently pushed against any cuts to the project, with clinicians warning that further reductions could compromise patient safety.

The project remains budgeted at $1.9 billion, despite the Government stating unreleased estimates suggested the full cost could exceed $3b.

Negotiations for the main construction contract are still ongoing.