Friday 18 January 2019

€1.43bn cost of national children's hospital set to rise further

Taoiseach Leo Varadkar. Photo: Damien Eagers
Taoiseach Leo Varadkar. Photo: Damien Eagers

Eilish O'Regan and Kevin Doyle

The cost of the new national children's hospital, which has spiralled to €1.43bn, is in danger of rising further due to construction inflation and other unavoidable pressures.

John Pollock, project director for the new hospital, revealed the builders BAM Ireland will be allowed to recover the cost of increased construction inflation from next year. Construction inflation, fuelled by labour shortages in particular, is soaring and has risen by 60pc since 2014.

There may also be other unforeseen demands such as new laws which will need to be followed, according to Mr Pollock.

He was speaking after alarmed politicians demanded an investigation be launched into how the cost of the hospital, under construction at St James's campus in Dublin and due to open in 2022, went up from €1bn to €1.43bn.

Fianna Fáil leader Micheál Martin said the "ballooning costs" were "beyond comprehension".

Taoiseach Leo Varadkar conceded: "It may turn out to be one of the most expensive children's hospitals in the world, but it will also be one of the best."

Outlining the background to the increase, Mr Pollock cited the €94m related to design, €21m arising out of engagement with doctors and their demands, €27m due to planning rules on inclusion of fire sprinklers, and €90m incurred as a result of the completion date being pushed out by nine months.

He said another €22m was due as a result of "claims submitted by three contractors, adjudicated by an independent expert".

The equipping of the two satellite centres being built at Connolly Hospital and Tallaght Hospital added €16m.

Tom Costello, the National Paediatric Hospital's chairman, said they believe the two-phase process adopted was the right way to go because it means they were able to begin work on the site two years ahead and finish earlier.

The two-stage process agreed in 2014 involved firstly a full tender for the basement substructure which is nearing completion, completed on the site. The satellite centre in Connolly will be ready by next summer and the centre in Tallaght by 2020.

Phase B, which involves construction of the building, is also to go to BAM.

Mr Costello said he did not believe building a contingency fund into the original price was the way to go.

But both men admitted they were surprised by the "quantum" of the increase in cost.

Mr Costello said the project is so complex and large that once it starts it is like driving a massive liner that is difficult to turn.

It emerged at Cabinet yesterday that €5O m of the additional money needed for the hospital will have to be taken from other capital projects next year, confirming other facilities will suffer.

Other costs have yet to be met from separate Exchequer budgets for its IT systems.

Both men insisted that it will provide the kind of hospital which will deliver excellent, reliable and safe clinical care which "people expect for their children with modern facilities that are fit for purpose and future-proofed".

Irish Independent

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