$35m paid for NT hospital dirt pile

The federal government has defended making a $35 million milestone payment for construction of a Northern Territory hospital that remains a pile of dirt.

Labor senator Nova Peris questioned why the money was handed to the NT government, after a concrete pour at the Palmerston Hospital site was filled in with dirt shortly after a press conference promoting the start of construction.

"So taxpayers' money has been given to the NT government to contract Lend Lease to dig a hole, get media out there, pour concrete in and within 24 hours - concrete I assume is not even dry - fill the hole back in?" she asked health department officials during a Senate estimates hearing in Canberra.

Deputy secretary Mark Cormack said it was not the commonwealth's job to supervise the work, insisting it was an issue for the NT government.

The department had received evidence the milestone had been met and the commonwealth made the required payment.

"The commonwealth does not get involved in the micromanagement," Mr Cormack said.

The hearing was told the commonwealth had handed over $56 million to the NT government in three separate payments since 2011 for construction of the hospital.

The next payment of $20 million is due in May 2016, upon completion of the base of the building, but Senator Peris questioned how the milestone could be achieved given the wet season kicks in next month.

Rural Health Minister Fiona Nash defended the payment and said she understood the hospital was on track for completion by 2018.

"I know you're trying to make this into something senator," she told Senator Peris.

"I don't know what else we can say to assist you."

Liberal senator Dean Smith said the hole had been covered for safety reasons while a fence was being constructed around the concrete slab.

"Gold medal for effort," he told Senator Peris, an Olympic gold medallist.