Thursday 22 August 2019

Cost of children's hospital at risk of rising another €50m

Jim Breslin: ‘It’s reasonable to say’ costs will rise. Picture: Tom Burke
Jim Breslin: ‘It’s reasonable to say’ costs will rise. Picture: Tom Burke
Eilish O'Regan

Eilish O'Regan

The cost of the new National Children's Hospital is at risk of rising by another €50m, the secretary general of the Department of Health has admitted.

Jim Breslin said that "it is reasonable to say it could cost another €50m if inflation stays at the current rate and this will increase if inflation is in excess of that".

He was appearing before the Public Accounts Committee and replying to Fianna Fáil Senator Marc MacSharry, who said there is an onus on officials to put a figure on the potential price escalation in the wake of the PwC report on how the cost spiralled from €1bn to €1.7bn.

The future cost containment of the project will remain a "battle" warned Fred Barry, chairman of the National Paediatric Hospital Development Board, which is responsible for its construction.

He disclosed that the building firm BAM had asked for another €12m in recent months as the public debate of the hike in costs raged.

The board turned this down and he believes while a lot of the cost risk has now been transferred to BAM, the pressure of construction inflation looms.

Questioned by committee chairman Seán Fleming, he revealed the board will continue to work with the same design company that has been criticised for its role in the cost escalation.

"Why would you continue to work with them?" asked Mr Fleming.

Mr Barry replied: "We are in contract with them. It is very difficult to change contracts in the middle of a live project."

He said the board is raising the need for changes with the firm and it will also strengthen its capability to "know what is truly going on".

Three members of the current board had indicated they want to step down and it will be a matter for Health Minister Simon Harris to appoint people with relevant expertise.

Meanwhile, the Department of Public Expenditure's chief procurement officer Paul Quinn, who was a member of the hospital board since 2013, defended his decision not to tell ministers or raise an alert about the escalating costs.

He said: "I would have been precluded and not only in breach of my obligations as a board member but also in breach of law if I were to report to the secretary general or the minister."

The protocol was for the board chairman to communicate the issues with the HSE steering group, he added.

"I was appointed as a public interest director," he told Independent TD Catherine Connolly.

The meeting was also told that PwC, which was paid €450,000 earlier this year to investigate the overrun, has also been paid to advise the HSE on how the project should proceed in November.

But both the HSE and the Department of Health said this was not a conflict of interest.

The defence was dismissed by members of the committee.

Social Democrat TD Catherine Murphy said the HSE was trying to make "eejits" of them and Sinn Féin TD David Cullinane described it as a "slam dunk" conflict of interest.

The hospital, which is being built on the site of St James's Hospital, is due to open in 2023.

The first satellite centre, providing urgent care and outpatient clinics, has now been handed over for fit out and is due to begin accepting patients from July.

Irish Independent

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