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Hospital delays costing Serco
Delay: The Fiona Stanley Hospital. Picture: Nic Ellis/The West Australian

Private contractor Serco says it will lose revenue because of the State Government's failure to commission the $2 billion Fiona Stanley Hospital on time.

The delay by one year of full operations means that under its contract Serco must "mitigate" by delaying the hiring of staff that would be required if the hospital was up and running.

"The contract value to Serco has reduced significantly in 2014 and there is no commercial benefit to Serco from the delay," the company's Fiona Stanley Hospital transition director Joe Boyle said yesterday. "Serco's contract value will be reduced by about 40 per cent in 2014 as a result of the delay."

The Opposition said the Government had failed to explain fully why it failed to act on outgoing Under- Treasurer Tim Marney's repeated warnings, stretching back to at least 2012, that the hospital would be delayed.

Mr Marney told a parliamentary inquiry on Thursday that he formed the view by September 2012 that the hospital commissioning was "substantially underdeveloped" and "probably way behind schedule".

He also said he was "pissed off" that Treasury got its first look at the $4.3 billion hospital non-clinical services contract with Serco just two weeks before it was signed by Cabinet.

Normally the agency would be engaged with such a negotiation for six to 12 months.

Opposition Leader Mark McGowan said Premier Colin Barnett and Health Minister Kim Hames had to explain why they were in "such a rush" to award the contract, the biggest in State Government history, before it was scrutinised appropriately.

Dr Hames told ABC radio "a team of experts" from the Health Department and State Solicitor's Office worked on the deal for nine months.

"If there'd been people in Treasury that had had more expertise than the experts we had on the committee I'm sure they'd have been welcomed on to it," he said.

"Just because they're Treasury and they have oversight of funding in this State doesn't mean that they have more expertise than the people on the committee who were negotiating the contract."

But Mr Marney said the contract created huge risks for the State because it required Health to complete certain IT systems before Serco could meet its IT obligations.

He said Health's record on IT was poor and it had since required an extra $151 million in Budget top-ups to fix systems - work that was not complete and could cost a further $25 million to $50 million.