Friday 22 March 2019

Government rejects claim that big money could be saved at new hospital

Independent TD Mick Wallace told the Dail that cancelling the current deal would make financial sense in the long term.

Work continues at the site of the new National Children’s Hospital at St. James Hospital in Dublin (Brian Lawless/PA)
Work continues at the site of the new National Children’s Hospital at St. James Hospital in Dublin (Brian Lawless/PA)

By David Young and Cate McCurry, Press Association

The Government has rejected a claim that retendering the construction contract for the National Children’s Hospital would save half a billion euro.

Independent TD Mick Wallace told the Dail that cancelling the current deal would make financial sense in the long term.

The predicted cost of the new hospital, on the campus of St James’s Hospital in Dublin, has soared from an original estimate of 650 million euro to more than 1.7 billion euro.

The controversial overrun has heaped pressure on Health Minister Simon Harris.

An independent inquiry by PWC, which was set up to assess the errors, is expected to be completed by the end of next month.

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Independent TD Mick Wallace believes a new model for financing the project should take place (Brian Lawless/PA)

Mr Wallace said it was not too late to cancel the current contract before costs spiralled further.

During leaders’ questions he told Tanaiste Simon Coveney: “We have not reached a point of no return.

“The extra cost that we are looking at now will be far exceeded in time if you continue on this road. I think you need to stop and retender.”

The Wexford TD, a property developer himself, added that such a complex engineering project was better suited to a “re-measurable contract” rather than the current “fixed price” model.

“I suggest you could save yourself in the region of half a billion if you retender it and go for a measurable contract rather than stick with a fixed price contract which is going to cost you a lot more than 1.7 billion,” he said.

“I have already said I don’t expect it to stop at 2.2 billion.”

Mr Coveney acknowledged that Mr Wallace was bringing expertise to the debate.

But he insisted the advice being given to Government was that retendering would not result in a saving.

He said a “significant mistake” had been made when costs and quantities were initially estimated.

“Those mistakes have been corrected and we now have a more expensive project but nobody is suggesting, as far as I am aware of in terms of the advice to Government, that by retendering here we would get this done for less money,” he said.

My understanding is that retendering this project at this stage to deliver the same project would not result in a significant saving of money Simon Coveney

“So I think it is important not to make suggestions here without backing that up.

“My understanding is that retendering this project at this stage to deliver the same project would not result in a significant saving of money.”

Taoiseach Leo Varadkar said he will ensure lessons will be learned and that the project will be delivered “on time and on budget”.

Speaking at Dublin airport on Thursday, he said: “We shouldn’t lose sight of the bigger picture here. The National Children’s Hospital is a project that has been spoken about since the 60s, was called for by doctors in 1993, and is now at long last under construction.

“When it’s built, just like so many other projects, nobody is going to regret that we built it and no one is going to think it’s a bad investment.

“There are many problems, and part of what PWC is doing is working out exactly what went wrong and how things might have been done differently.

“The decision was made to go for a two-phase contract so we knew what the first phase cost, and only had an estimate for the second phase which turned out to be wrong.”

Press Association

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