New Shellharbour Hospital & Integrated Services

MBM Project Lead

James Larkin

Client Name

Health Infrastructure

Sector

Health & Research

Timeline

2021 – Ongoing

Project Value

$782m Hospital and Carpark

MBM Project Team

  • Stoyan Dimitrov 
  • Charmaine Resos
  • Kathryn Wray
  • Neville Pan 
  • Amelia Pan
  • Miranda Mai

Services Provided

Pre contract cost planning, business case development, post contract cost management, lifecycle costing, cost reporting.

Project Background and Scope

In September 2020, the NSW Government announced a major $782 million investment to upgrade health services across the Illawarra Shoalhaven Local Health District (ISLHD), aiming to meet the growing needs of the community.

At the heart of this investment is the New Shellharbour Hospital (NSH)—a brand new, purpose-built health facility on a greenfield site. The redevelopment is part of a broader area-wide strategy and includes related projects in Bulli, Wollongong, Port Kembla, and Warrawong.

The scope of the NSH project includes:

  • A significantly larger, modern hospital designed to function as a key regional referral centre for the Illawarra.
  • Comprehensive supporting infrastructure: green spaces, landscaping, road access, services/utilities, and both at-grade and multi-deck car parking.
  • Clinical services such as:
    • Emergency department
    • Increased surgical and acute care capacity
    • Mental health and rehabilitation services
    • Renal dialysis and outpatient services
    • Aged care services in a patient-focused environment
    • Improved public transport access

The project is being delivered in partnership with Health Infrastructure and Illawarra Shoalhaven Local Health District.

Project Challenges

Delivering this project within a live hospital environment brought several logistical and financial challenges, especially around the temporary relocation (decanting) of essential departments. MBM worked closely with the project team to find smart, cost-effective solutions that reduced disruption and delivered real value for money.

  • Site preparation and infrastructure costs: Lack essential infrastructure (roads, utilities, drainage, power, water, sewage). Costs for site clearing, grading, and environmental mitigation can be significant and difficult to estimate early on. Unexpected ground conditions (e.g., poor soil, contamination) can lead to costly design changes or foundation works.
  • Complex design and compliance requirements: Hospitals have generally stringent requirements for clinical areas, infection control, mechanical and electrical systems, and futureproofing for new technology and NSH is no different

The building also had High specification standards (e.g., HVAC systems, medical gas systems) which drove up costs and required rigorous cost control during design development. Extensive stakeholder engagement (clinicians, operational staff, regulators) resulted in scope creep and design changes.

  • Supply chain and procurement risks: Risk of price escalation for labor and materials, especially in the Illawarra regional area, was impacting cost certainty.

MBM Solutions

MBM played a key role in helping the project team navigate through these challenges efficiently and cost-effectively. Our approach was both hands-on and solutions-focused:

  • Adequate contingency for ground conditions: We include robust allowances for unforeseen in-ground conditions,
  • Phased Enabling works: Separate site infrastructure (earthworks, roads, utilities) as an early works package to de-risk the main construction budget and schedule.
  • Independent cost benchmarking and VE workshops: Compare against similar hospital projects locally to identify potential savings.
  • Engage experience contractors: Shortlist contractors with proven hospital delivery experience to ensure realistic pricing and reduce risk of cost overruns.
  • Escalation allowances and procurement risk contingency: We include realistic escalation estimates for labor and material costs, especially for multi-year projects.