Tuesday 22 October 2019

Some costs of new children’s hospital ‘completely misestimated’

Simon Harris told the Dail that some costings had not been calculated correctly.

Health Minister Simon Harris was questioned in the Dail over the spiralling costs of the new children’s hospital (Niall Carson/PA Wire)
Health Minister Simon Harris was questioned in the Dail over the spiralling costs of the new children’s hospital (Niall Carson/PA Wire)

By Michelle Devane, Press Association

The Health Minister has said some costings of the National Children’s Hospital plans had been “clearly completely misestimated”.

Simon Harris told the Dail that the quantities of materials necessary to build the new hospital had not been calculated correctly.

He made the comments during statements in the Dail on Wednesday evening over the escalating costs at the hospital.

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

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Construction of the new National Children’s Hospital taking place in Dublin (Niall Carson/PA)

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

Mr Harris said the PWC report will look at in more detail where design decisions went wrong.

“Where things clearly went wrong was the quantities of materials needed to be used which was clearly completely misestimated but I need to wait for the PWC report to actually establish where to go in that regard,” he said.

Fianna Fail TD Stephen Donnelly said a Mazars report had attributed about 230 million to 240 million euros in additional overrun to calculations that were wrong.

Mr Harris said if the PWC report indicated there was wrongdoing or a failure on behalf of professional firms to do what they should have done the government would “pursue vigorously”.

“If people made significant errors we will make sure they’re held to account and we’ll use the full vigour of the law to make sure that’s a reality,” Mr Harris said.

Mr Donnelly said it was construction costs not inflation costs that were at the heart of the problem.

Mr Donnelly said a Mazars report found that construction costs at the hospital went up by 56% in an 18-month period between April 2017 and November 2018.

He said inflation had only increased by 2% more than the 4% that had been budgeted.

Mr Harris accepted that construction inflation did not explain the rising costs.

“If it was simply a matter of inflation we wouldn’t need an inquiry,” he said.

On Tuesday Mr Harris “sincerely” apologised over an answer he gave to the Dail about the overspend at the National Children’s Hospital project.

Mr Harris apologised for information he gave last September about the costs, admitting he should have answered it “more fully”.

He told the Dail he was not in a position to give commercially sensitive figures at the time and that it had never been his intention to mislead the Dail.

Sinn Fein’s Louise O’Reilly said on Wednesday that Mr Harris may have apologised over the information he had provided but that he had not apologised for the overrun.

She said projects would end up being delayed.

“There are clearly going to be consequences, you just haven’t told us what those consequences are.

“As we are here today the overrun is currently at half a billion euro.”

Ms O’Reilly questioned why he had not consulted with the Finance Minister about the overrun he had learned of last August.

She said it was not credible that he did not have the full facts.

“If you had asked you would have known that cost were only going in one direction,” she said.

“They were not fluctuating.”

Mr Harris accused Ms O’Reilly of misleading the Dail by saying it had overrun by half a billion euro.

Mr Harris said it was a projected overrun, not an actual overrun, of 450 million euro.

He said the decision to proceed with the project was the right one.

The Finance Minister agreed with Mr Harris that the best option was to move ahead with the project.

Paschal Donohoe said he took responsibility for the spending overrun because it happened on his watch.

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