Lendlease to cover costs of replacing combustible cladding
Lendlease, or its insurer, will pay for the replacement of external cladding that failed building-code fire standards on Melbourne's Royal Hospital. It's one of 20 medical centres that Victoria state health officials say are clad in materials that pose a fire hazard and need retrofitting. 

Lendlease will cover the cost of replacing combustible cladding on Melbourne's Royal Women's Hospital, in what Victoria's top health property official says will be the first of 20 hospitals that need to be rectified.

The contractor – or its insurers – will foot the bill for rectifying the 10 per cent of external cladding that does not comply with the building code and is the first of eight hospital buildings that the state government says has cladding that will be removed and replaced.

Twelve more hospitals are undergoing extensive tests to determine whether their cladding meets building code requirements.

Lendlease will replace cladding on Melbourne's Royal Women's Hospital. Daniel Pockett

"There's a level of compliance where they actually didn't deliver the building in the way we asked for the building to be built, so therefore they accept that they have to rectify it," said Robert Fiske, the chief executive of the Victorian Health and Human Services Building Authority.

Lendlease's liability for the work – a consequence of its acquisition of the hospital's original builder Baulderstone Hornibrook – has previously been reported. The disclosure on Friday of the list of up to 20 hospitals, however, makes it clear that the costs of non-compliant cladding is now hitting the wider construction industry.