Building debt falls to board

Press, 31 August 1989, Page 2

Building debt falls to board

By

DEBORAH MCPHERSON

The Canterbury Area Health Board faces a $97 million debt from its building programme next year because of a change in the allocation of capital work funds by the Government. Until this year area health boards borrowed money for new buildings and the Government repaid the interest and the principal of the loans. Now boards are responsible for servicing the debts.

Boards, rather than the Health Department will now decide which buildings should be built as well.

The Canterbury board took responsibility from July 1 for an existing net capital works debt of $97 million. That includes the loans it raised for its stage-three redevelopment at Christchurch Public Hospital, other longterm loans for buildings already built and expensive equipment. Of the $97 million, about $4O million will be spent on the stage three redevelopment, Ashburton Hospital’s redevelopment programme, and other

new buildings at Sunnyside, Princess Margaret and Burwood hospitals. The stage three redevelopment at Christchurch Hospital is expected to cost a total of $133 million.

Principal repayments of $3l million are also due during the next 12 months. The total debt will be repaid during the next 20 years.

The board’s financial controller, Mr Rod Margetts, said the capital works programme was separate from maintenance from which it was required to save $3O million.

The board recognised it could not use capital funding for its maintenance programme, he said. The chairman, Mr Tom Grigg, said most other large boards had finished their building programmes, before the change in capital funding had been announced by the Government.

“It changed just as we were due for a piece of the action,” he said.

The board’s capital funding allocation from the Government was $23 million (excluding $2.9 million in GST), he said.