The new Dunedin hospital was to be the largest-ever health infrastructure investment in New Zealand.

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About 35,000 people protested in Dunedin on Saturday after ministers announced they would either reduce the size of the project or complete it in stages, amid fears the cost could balloon to $3 billion. More protests are planned.

A government-commissioned report found current plans couldn't be delivered within the $1.88b budget.

During campaigning for the last election, the National Party had promised the hospital would be built.

Finance Minister Nicola Willis during an urgent debate on Thursday said the project had been "plagued by problems".

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Here is a brief recap of the its timeline to date:

2015:

The Ministry of Health appointed Southern Partnership Group to lead hospital redevelopment. It released business cases for two options, both estimated to cost between $1.2b and $1.4b.

2017: Political buy-in

Labour promised to begin building a new hospital in its first term if elected to government, and ruled out funding it through a public-private partnership.

National had already promised to build a new hospital, with the party saying it would consider all funding options.

2018: Site selection

The Health Ministry announced the project would be done in two stages: the outpatient building and the inpatient building.

Southern Partnership Group, chaired by Pete Hodgson, a former politician for the Labour Party and Member of Parliament for Dunedin North from 1990 to 2011, was responsible for choosing the site.

On 4 May, then-Health Minister David Clark announced the new hospital would be built on the old Cadbury Chocolate Factory site and parts of surrounding blocks. The site was chosen to maintain the compact and central nature of Dunedin's health and education facilities, while giving flexibility for the final design and allowing for further development later.

2019: Drilling and digging

Engineering consultancy Tonkin + Taylor used special equipment to drill to depths of 30 metres, to help provide a better understanding of the ground conditions for the foundations of the new hospital.

Parts of the site had previously been registered as an archaeological site, with excavation work monitored by members of New Zealand Heritage Properties and archaeological consultants.

On 23 December, Clark said architects Warren and Mahoney, the country's largest architectural firm, had been awarded the design contract.

2020: Demolition work begins

Staged demolition works began in February, carried out by Ceres New Zealand LLC, who played a key role supporting the Christchurch rebuild.

In September, the government agreed on the preferred design for the new hospital. The option approved by Cabinet broadly aligned with the preliminary site masterplan.

The total budget for the project was expected to exceed $1.4b.

2021:

Contracts were negotiated for the next planning and design stages.

The demolition of the former Cadbury factory continued.

2022:

Construction of the outpatient building started with a ceremony on 3 June, 2022.

Consent for this building was granted in August.

Following cost pressures, there was a redesign, cutting beds, operating theatres, imaging services and other aspects of the then-$1.5b build.

2023:

Outpatient centre construction continued. Piling was completed in mid-2023, with 78 piles in place at an average dept of 19m below ground. In August, the first structural steel column was in place.

Meanwhile, archaeologists worked to preserve and identify findings as part of an extensive excavation process on the inpatient building site.

New architectural images of the new building were released, with 410 inpatient beds, a 53-bed emergency department, an operating theatre suite, a short-stage surgical unit, intensive care unit, neonatal intensive care unit, and a dedicated primary birthing unit. Design planning was expected to continue for another 18 months.

After the election, the new government said the cost had risen. It commissioned an independent review by Robert Rush, whose report would lead to the nearly $3b figure quoted in September, 2024.

In November, resource consent was granted by the Environmental Protection Authority for the inpatient building, subject to a number of conditions.

2024:

In March, Cabinet authorised a further $290 million in capital funding due to cost pressures, officially taking the total from $1.59b to $1.88b.

In June, the main structure of the new outpatient building was in place. The following month, the exterior facade was installed.

In September, came the controversial announcement that the government was seeking advice on two options for delivering the project within its existing funding appropriation.

Despite the project's original 2017 cost estimates of $1.2-$1.4b, it was possible it could end up approaching $3b, making it one of the most expensive hospitals ever built in the southern hemisphere, Infrastructure Minister Chris Bishop said.

"Health NZ and Infrastructure Commission advice has made it clear that this project was troubled from the moment the site was selected in 2018 and has been trapped by this poor decision making ever since," Health Minister Shane Reti said.

What now?

The outpatient building was expected to be finished in 2026 and the inpatient building by 2029.

Ministers have told Health NZ the project is to be delivered within its current appropriated budget ($1.88b), and to provide urgent advice on two options for delivering it.

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One option is revising the project within the existing structural envelope, such as by reducing the floors, delaying the fit-out of some areas, or looking at services that can be kept at the original site or in other Health NZ buildings.

Another option is a staged development on the old hospital site - known for asbestos issues and leaks - including a new clinical services building and refurbishment of the existing ward tower.

Advice was expected in "coming weeks".

Dunedin mayor Jules Radich told RNZ the $3b figure was an exaggeration: "They've included in that things like carparking and pathology and other services that were never in this scope, and were taken out of the scope two years ago."

The government appeared to be looking for an excuse to get out of its promise to build the new hospital, he said.

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