AUSTRALIAN taxpayers have paid $56 million for a hole to be dug, filled with concrete and then covered over with dirt again.

It’s not a return to the Keynesian economics that help beat the Great Depression it’s how the federal Health Department manages the construction of a new hospital.

Under grilling at Senate Estimates the Health Department revealed it has paid the Northern Territory Government $56 million in three instalments since 2011 to build the new Palmerston Hospital that will serve the satellite city of Darwin.

Four years and $56 million into the project the only construction work was carried out last week when contractor Lend Lease dug a hole for a staircase, filled it with concrete and then covered it over with dirt.

media_camera Hole dug ... Minister for Health John Elferink and Member for Solomon Natasha Griggs inspect progress of works at the new Palmerston Regional Hospital. Picture: Supplied.

Northern Territory Health Minister John Elferink called a media conference to mark the event after coming under pressure over the project which was meant to have begun in 2014.

Federal Member for Solomon Natasha Griggs also hailed the event.

“In the two years since the Coalition took government federally, this project has gone from Labor’s unrealised promise of a 60 bed clinic to construction underway on a 116 bed, level 3 hospital,” she said.

The Department of Health says the digging of the hole had nothing to do with its decision to provide the latest $35 million payment instalment on October 7.

A spokeswoman for the Department of Health said the NT Government is responsible for the management and delivery of the Palmerston Hospital project.

As reported by Department officials in today’s Senate estimates hearing, the NT Govt provided a range of evidence to the Department of Health in relation to achievement of this milestone, she said.

This evidence included engaging Lend Lease as Managing Contractor on 22 July 2015, early design documentation, detail on the Project Schedule, photographs indicating commencement of work on site clearing and remediation.

Under the current agreement, the next payment of $20 million will be paid on completion of the base of the building due in May 2016, she said.

But Labor Senator Nova Peris told Senate Estimates the work was a “stairway to nowhere”.

media_camera Stairwell to nowhere ... The hole that was filled with concrete for the stairwell to the new Palmerston Hospital has been filled in less than a week after the press conference to announce the start of construction. Picture: Supplied.

“The Minister for Health must immediately detail how this was not merely a stunt straight out of the TV Series Utopia,” she said in a media release.

Deputy Secretary of the Department of Health Mark McCormack said the Commonwealth Government was not involved in the micro management of the project.

“It’s not our job to supervise the digging of holes, its dimensions, its purpose, that is for the managing contractor,” he told the committee.

To get the milestone payment the Northern Territory Government had to engage a managing contractor who took possession of the site and then commenced construction, Mr McCormack said.

“They’ve met the milestone, it doesn’t specify holes to be dug” he said.

The Northern Territory Government must ensure the base of the hospital is completed before it can claim the next $20 million milestone payment that is due in May 2016, the Senate committee was told.

The hospital is due to be completed in 2018.

Originally published as The $56 million hole in the ground