The redevelopment of the Royal Victorian Eye and Ear Hospital has been plagued by delays and cost blowouts, leaving the state government with no choice but to provide a $21.4 million bailout.
Touring the hospital on Sunday, Health Minister Jill Hennessy said the former government had bungled the project by failing to properly plan for asbestos removal, leaving a $30 million black hole.
The hospital will also add an extra $10 million to ensure the works are completed.
"Unfortunately the project to develop the eye and ear hospital has hit some very challenging hurdles in recent years," Ms Hennessy told reporters on Sunday.
"And we've been forced to fix up the mess the Liberals left behind."
Ms Hennessy said the government was faced with the decision to provide a funding lifeline or close the project down, and was pleased to announce her government would fund the shortfall.
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