It's time the public was informed of the total cost of the redevelopment of King Edward VII Memorial Hospital (KEMH), said Opposition MP Grant Gibbons.

He raised concerns in Wednesday's House of Assembly session that taxpayers did not know the details of the multi-million dollar deal, or how it would be paid off in the coming decades.

Health Minister Walter Roban had earlier outlined the Ministry's $181 million budget, of which the hospital will receive $125 million approximately 69 percent.

During Minister Roban's hour and 45-minute brief, he outlined the hospital's successes, [see page 11] and laid out plans for its redevelopment.

In 2008 Johns Hopkins Medicine International reviewed KEMH's estate plan. It noted the hospital needed about 50 percent more space in order to provide the services needed in Bermuda in the near term.

"Government therefore approved the first phase of this long-term development: A five-year project to increase the amount of space available through new construction and upgrading the existing King Edward building," Minister Roban said.

"In the report, Johns Hopkins estimated that the construction costs for the new facilities would be about $260 million and the renovation about $55 million."

He added that the Bermuda Hospitals Board (BHB) would pay for the upgrades of the current building while the construction of the new wing would be paid for by a public-private partnership (PPP), under the Design-Build-Finance-Maintain model (see sidebar story).

It is Bermuda's first PPP and Mr. Roban said it was important to ensure it was done correctly and the reason why consultants costing $10 million over a three-year period have been hired.

He added this was in-line with what other jurisdictions paid for consultants on their first PPP.

Over the past year, five teams entered proposals to bid for the construction contract, three bid teams were shortlisted.

"Based on data in the request for proposal, the three bid teams will be required to submit binding proposals to design, build, finance and maintain the new facility over the life of the project agreement, a period of approximately 30 years," he said.

"BHB will evaluate the proposals based on pre-established criteria and a successful bidder will be invited to enter into a project agreement with BHB in late 2010.

"This means we expect to see groundbreaking before the end of this year. It gives me great pleasure to be able to state that at this point we are both on time and on budget with this project."

But Opposition MP Grant Gibbons said that there was still no clear understanding of what the redevelopment would cost, and how it would be paid.

"We are really not going to know what this will cost until the bids come back," he said. "These things [PPPs] are not a silver bullet, they have their own issues and own problems and we have not had a discussion about that.

"The Minister has said it will cost $10 million over three years for consultants, but when will we have a clear understanding of what this is going to cost?

"We have not heard how it is going to be paid back? We have not heard what the impact of this will be on users' fees at the hospital, how will we have to pay for it?

"Will there be a Government guarantee on this? Will we have to raise our debt ceiling to cover the guarantee?"

He added that he was also concerned the hospital subsidy had not risen in this year's Budget.

The subsidy covers a portion of the cost of hospital services for the elderly, homeless and residents under 16 as well as geriatric care and dialysis.

In 2010 it will be allocated $86 million the same amount it was allocated in 2009, despite the fact that it overran its budget last year by $15 million.

It is the fourth year the subsidy has cost more than budgeted for. Minister Roban said this was a result of "increased utilisation" and was "largely due to the increase in the Bermuda Hospitals Board fee charges that came into force in April 2008".

But Dr. Gibbons said it appeared to be "wishful budgeting" on the Ministry's part by not raising the subsidy.

"I cannot understand it, last year it went over by 18 percent," he said. "And if the Health Minister came with that estimate the Finance Minister should have said it is unrealistic."

MP Louise Jackson lambasted the Minister for his lengthy brief, which included references to new linen and new crockery at the hospital.

"I have never in my life heard a Budget reply as the one just given here," she said. "It is an insult to taxpayers. This is a budget debate not a monologue."