Wednesday 16 October 2019

'Clear pattern of cost overruns in capital projects' as 35 out of 38 go over budget

Construction of the new National Children’s Hospital taking place in Dublin (Niall Carson/PA)
Construction of the new National Children’s Hospital taking place in Dublin (Niall Carson/PA)
‘Costing taxpayers’: Fianna Fáil’s Michael McGrath. Photo: Gareth Chaney, Collins
Laura Larkin

Laura Larkin

The budget overrun in the new National Children's Hospital is not an isolated incident, new figures show.

A total of 35 out of 38 health and education projects nationwide ran over the agreed price after contracts were signed, figures compiled by Fianna Fáil's finance spokesperson Michael McGrath show.

These include a 56pc over-run in St Luke's Hospital, Kilkenny, with the hospital costing more than €7m extra than the agreed costs.

The total overruns have cost €42m since 2010, the data shows.

The cost hike seen in the St Luke's Hospital project, where a new emergency department was among the first phase of redevelopment work, was due to "additional scope added post-contract".

This included a fit-out of the oncology department and education centre. There was also a €750,000 settlement due to "delay and prolongation".

Changes to contracts were among other reasons cited for price changes in various health projects.

In one instance, the original contract did not include the structural link between Our Lady of Lourdes Hospital, Drogheda, Co Louth, and five refurbished theatres.

In other instances, additional clinical requirements were added to the contracts or the scope was extended.

There were also projects that saw time delays or other factors which pushed back a deadline.

Conciliation was used in a number of contracts to agree the final sum.

In respect of the Department of Education projects, the average overrun was 5.5pc and Education Minister Joe McHugh said the department "carefully manages and controls costs on all projects".

The most significant overrun related to Clonburris post-primary school in Lucan, Co Dublin, with the final cost jumping by 22pc to almost €16m.

In Cork there was a 14pc increase on the €11.5m projected costs for St Angela's College.

Mr McGrath said the figures show there are difficulties that go beyond the overrun seen in the National Children's Hospital.

"While the sums involved in the National Children's Hospital debacle are extraordinary, this data shows the difficulties in managing capital projects do not end there," he said.

"These figures show a clear pattern of projects costing more than the agreed contract price.

"It is time for a root-and-branch review of how public capital projects are managed. We need to know why so many projects end up costing taxpayers far more than planned."

A review of how public spending on major projects is handled is under way and key reforms are also being implemented to avoid major differences between contracted costs and the final bills for infrastructure projects.

Meanwhile, the incoming chairperson of the board leading the development of the hospital, Fred Barry, will face questions at a Health committee hearing tomorrow. It will mark his first public engagement since being selected by the Health Minister to lead the troubled project.

Five builds costing more

  • Phase one redevelopment of St Luke's Hospital, Kilkenny - including a new emergency department - increase of 56pc (€7.3m)
  • Replacement of acute mental health unit at University Hospital Galway, an increase of 16pc (€2.5m)
  • Clonburris post-primary school, Lucan, Dublin, an increase of 22pc (€2.8m)
  • Cluain Lir St Mary's Mullingar 100-bed Community Nursing Unit, an increase of 27pc (€3.1m)
  • Our Lady of Lourdes Hospital, Drogheda, phase two construction of ward block, rooms and theatre department, an increase of 7pc (€1.4m)

Irish Independent

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