The Dr. Everett Chalmers Hospital in Fredericton is in line for $200-million in upgrades.

Health Minister Ted Flemming revealed the news on Thursday, saying spending cuts and other savings have allowed the department to free up enough cash for the renovation program.

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"The heavy lifting is over," said Flemming. "This is a classic turnaround. We are ready to start investing now, back into health care."

Asked how an expenditure of that size could be justified in a time of government restraint, Flemming said, "We are not out of the health-care business.

"We are in the health-care business. We are in the health-care business with efficiency, with a new sense of purpose."

Blaine Lynch, the regional director of capital infrastructure and physical resources for Horizon Health Network, said a number of areas in the Chalmers were targeted for improvements during a review in 2007. He referred to the units for intensive care, ambulatory procedures, day surgery, surgery, maternal newborn, gynecology services, post-anaesthetic care, and specimen collection as among those in need of attention.

"Those areas are areas that have been identified as part of the program that we're looking at," said Lynch.

Lynch said the upgrades would certainly require an expansion of the hospital, probably to the rear of the building.

"Two-hundred millions dollars is a fair amount of money to do what has to be done," he said.

The province provided $1-million for planning the project this year.

The hospital opened in 1976. It has 315 in-patient beds.