Central Highlands Rural Health hopes to engage a contractor in the coming months to start work on its Daylesford Hospital operating theatre.

An additional $1.6 million in contingency funds from the Victorian Health Building Authority has been made available to cover significant increases in build and materials costs due to global supply shortages.

CHRH CEO Maree Cuddihy said the hospital theatre refurbishment would ensure more locals could get the surgery they needed closer to home.

“We are delighted to receive this additional contingency funding from the Victorian Health Building Authority,” she said.

“With the funding secured, we expect to engage a lead contractor by the end of next month.”