When will the Bordertown community get a new medical hub?

That’s the million-dollar question ratepayers are asking the Tatiara District Council that’s battling a “developer crisis”.

Plans for a multi-million-dollar medical clinic on the land next to the Bordertown Hospital in the South Australian country town have been scrapped as the developer faces a cost blowout of over $2million.

The news of the developer pulling out has left the council in a very difficult position, prompting fears of delays and additional costs.

And the council now faces huge uncertainty over who will replace the developer, giving the community a much-needed hospital to address their health-related challenges.

The land next to the hospital had been earmarked for the development of the medical hub by a local doctor, Remona Pungutan, since 2021.

The idea behind this medical facility was to have a space that would be able to bring visiting specialists, allied health services, and more GPs to the town.

The project also encountered some unexpected hurdles with the Native Vegetation Council’s refusal to support the development, but after some negotiation was able to progress with the execution of contracts of sale in October 2022.

According to documents sighted by this newspaper [Naracoorte Community News] , the initial costs for the clinic were expected to be around $4.5 million.

In a letter to the council, which owns the land, Dr Pungutan said it would now cost between $6.2million and $6.7million.

“I am very sad to inform you that, given the current mortgage and construction climate, it is no longer feasible for me to develop the medical hub on the land adjoining the hospital,” Dr Pungutan said in the letter.

“Back in 2022, the cost of the project was $4.5 million, with repayments calculated at $24,000 a month, which was a reasonable amount to pay.

“In the meantime, as you are aware, there have been challenges with the architectural designs and native vegetation, which have caused delays.

“As of April 2023, the cost of the project has increased to $6.2 million, with the possibility of increasing to up to $6.7million with monthly calculated repayments of up to $64,000, which is not feasible for me to pay.”

Dr Pungutan said that in the last three years, she has worked hard, put in a lot more time, and spent close to $250,000 to plan and build the hub close to the hospital, however, it was a sad realisation recently that it was no longer feasible for her to develop it.

“I have explored all avenues to try and get the development going, including having conversations with local possible private investors and the Bordertown Health and Community Foundation, however, it was unsuccessful.”

She said she intended to pursue the goal of building a hub, however, at a different address where it was financially possible for her to build.

“I have recently bought the properties on 21–23 Woolshed Street and will engage the help of a local builder to build a facility in this location that can accommodate more GP’s and visiting specialists to Bordertown.

“It may possibly take 18 months to build. I understand that the Council may open another expression of interest to anyone who wishes to build a hub on the land adjoining the hospital. I have the completed architectural plan for anyone who may wish to check it.”

In an interview with this newspaper, council chief executive officer Anne Champness explained what happened.

“To summarise, in March 2021, Council called for expressions of interest to develop a portion of its land on South Terrace, adjoining the Bordertown Memorial Hospital, for medical purposes,” Ms Champness said.

“In May 2021, Dr Pungutan was selected to develop the land.

“Over the next couple of years, Dr Pungutan prepared designs, we worked through issues with native vegetation, etc., and in August 2022, we resolved to sell a portion of the land to Dr Pungutan for the development of a medical hub.

“In August 2023, Dr Pungutan advised that she was unfortunately unable to proceed with the development due to the steep escalation of construction costs and interest rate increases that followed in the wake of the pandemic, which resulted in the project no longer being commercially viable.”

At the October council meeting, the council considered its next steps, in particular, whether to call for expressions of interest again, hold off calling for expressions of interest until the construction and financial sectors have settled a little more, or abandon the development of the land for medical purposes altogether.

The council decided that:

1. Defer a possible call for expressions of interest to develop part of its land on South Terrace Bordertown until the construction and financial sectors settle from the combined impacts of the global pandemic, the war in Ukraine, and national climate events to 2024/2025.
2. Seek 50 per cent of the contract of sale costs, $5,152.45, from Dr Pungutan of Bordertown Medical Hub Pty Ltd.

Ms Champness said the council was disappointed the project could not go ahead.

“I know the community was really looking forward to this as well, so I know there will be a few disappointed people.”

In October 2022, an angered group of Tatiara residents called on the state government to investigate the council’s “veil of secrecy” surrounding the development of the proposed new medical hub.

This newspaper [Naracoorte Community News] reported that residents Des Murray, Peter Grosser, Bryan Paech, and John O’Brien had written to the local government minister, Geoff Brock, asking him to “look into” the council’s lack of consultation, particularly about “the use of community land purchased to develop medical amenities”.

In the letter, the group said the council “seems to be allowing a private development in preference to a community-funded project that would be available to all doctors in Bordertown”.

They claimed the ensuing uncertainty had led to another doctor leaving the town.

However, in a statement, the former mayor, Graham Excell, said public consultation regarding commercial proposals was inappropriate.

In the article, Mr Excell explained that the private proposal being led by medical professionals was one of the key differentiating factors for its success.

“Council felt that a development led by a medical professional was significantly more likely to succeed in the long term than one led by a community organisation, however passionate and well intentioned,” Mr Excell said in the article.

Council mayor Liz Goossens noted that Council understood well the impact supply shortages and the escalation of construction costs had on building projects.

“We have certainly experienced significant post-Covid cost increases in our own operations and capital projects. It would have made it especially challenging to undertake a project of this scale.”

Ms Champness said the decision made by the council in its October meeting meant the development of a medical facility on the land “had not been abandoned”.

“…but simply delayed for a while, to be revisited when the economic climate is more favourable to big construction projects such as this.”

This article appeared in the Naracoorte Community News.