The Healthcare Institution of South Iceland
Expansion and Renovation of Facilities Approved
5th February 2026
Joint Committee on Public Works has approved construction works for the expansion and renovation of hospital and primary care facilities at Heilbrigðisstofnun Suðurlands (HSU) in Selfoss. A new extension of just over 5,200 square meters will be built to meet increased space requirements, alongside major renovations and reorganization of most of the institution’s older buildings.
The first phase involves the renewal and expansion of facilities for primary care, the mental health team, and home nursing services. This phase is fully funded, approval from the Joint Committee on Public Construction Projects has been granted, and work can therefore begin immediately. Completion of the first phase is expected by mid-2027.
“These are truly welcome news. HSU serves a large and diverse region, and the institution’s operations have grown rapidly alongside population growth and increased tourist traffic. The planned construction is therefore of great importance—not only for the facilities themselves, but for the quality of services we aim wholeheartedly to provide in the future,” says Díana Óskarsdóttir, CEO of HSU
The population of South Iceland has grown rapidly in recent years, and pressure on healthcare services has increased due to extensive tourism and large-scale recreational housing developments. According to a preliminary assessment, the number of inpatient rooms needs to increase from 20 to up to 40. In addition, facilities for the emergency department, outpatient clinics, diagnostic imaging, laboratories, maternity services, mental health services, primary care, home nursing, and executive offices need to be reorganized and/or expanded. Total space requirements are estimated at around 11,000 m², compared with the current 8,800 m². HSU currently employs around 850 staff in 604 full-time equivalent positions, and staff numbers are expected to increase by up to 20% over the next ten years.
Phasing of the Overall Project
Phase 1: Renovation of the west wing—primary care on the 1st floor, and primary care and mental health services on the 2nd floor.
Phase 2 – New North Wing: New construction for inpatient wards, emergency department, diagnostic imaging, maternity services and antenatal care, totaling 5,240 m².
Phase 3: Renovation of the east wing—outpatient clinics, offices, cafeteria, and basement.
The estimated total cost of all three phases at the preliminary assessment stage is between ISK 8.5 and 13 billion (with a variance of -15% to +30%). According to the timeline of the Government Property Agency (FSRE), all construction could be completed by 2034.