Ballarat-based builder H.Troon will be part of the beginning stages of the $541.6 million expansion of Ballarat Base Hospital.
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The relocation works require some hospital functions to be moved to allow for demolition works without disrupting services throughout the project.
Once completed, the redevelopment is planned to deliver a new emergency department, a women and children's hub, state-of-the-art theatre suite and an extra 100 inpatient and short stay beds.
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It is expected the upgrade will enable the hospital to treat at least an extra 18,000 emergency patients and 14,500 inpatients each year.
The hospital will also be able to have about 4000 more surgeries per year with a new critical care floor bringing together operating theatres, procedure rooms, an expanded intensive care unit, endoscopy suites and consulting rooms.
Member for Wendouree Juliana Addison said the project would create 1400 jobs over the next six years.
"It's excellent news that local company H. Troon will deliver the first stage of the $541.6 million Ballarat Base Hospital redevelopment," she said.
Member for Buninyong Michaela Settle said she was glad the significant, difference-making project was in 'local hands'.
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