Sunday 21 July 2019

Cost of new national children's hospital now soars to €1.7bn

On site: Work is under way at the new national children’s hospital next to St James’s Hospital.
Photo: Mark Condren
On site: Work is under way at the new national children’s hospital next to St James’s Hospital. Photo: Mark Condren
Eilish O'Regan

Eilish O'Regan

The massive bill for the new national children's hospital which is due to open its doors in 2022 will be at least €1.7bn, it emerged yesterday.

It has already spiralled from €983m to €1.4bn in the space of less than two years - but that will only cover the design, construction and equipping of the hospital.

However, it was revealed yesterday another €300m is needed to cover extras such as the IT system which has also gone €9m over budget.

The overrun of the long-awaited hospital, to be built on the site of St James's Hospital in Dublin, with two satellite centres, was described as a "catastrophic" failure by Fianna Fáil health spokesman Stephen Donnelly yesterday.

He listed the range of other projects which are likely to be put on hold - including facilities for cystic fibrosis patients and extra beds for gridlocked University Hospital Limerick - because it will command so much of the health capital budget.

He was reacting to members of the National Paediatric Hospital Development Board who were being grilled about the leap in costs at the Oireachtas Health Committee. The board admitted that lessons needed to be learned about how the project was managed.

Chairman Tom Costello said the €1.4bn which the board was responsible for would not increase and future risk was with the contractor.

But a separate €300m, overseen by children's hospital group chief Eilish Hardiman, is needed on top of this as well as philanthropic funding for its research centre.

Mr Costello said a two-stage tender process was used but the complexity of the project was underestimated.

Key areas of weakness included insisting on cost reductions from the contractor which later could not be delivered on.

They also had no early costings for the full amount of expensive cable for mechanical and electrical services needed for the digital-only hospital where doctors will use iPads instead of medical charts.

Mr Costello said in mid-2018 it became clear "there was a very significant gap development between the estimated quantities at tender stage and the quantities that were now required to deliver the completed design".

A €200m overrun was flagged to the Department of Health in August last year.

Project director John Pollock said the facility would be a digital hospital with 6,000 rooms which needed multiple data points. There has to be a "huge amount of duplication" including back-up systems, power supplies and generators, he added.

Other cost drivers included sprinklers which needed to be installed after the Grenfell fire in London and also the additional €90m which was added on because the finishing date was pushed out nine months to mid-2022.

The board said the two-stage procurement process was in line with best international practice and used in the construction of other hospitals - but they could not say if there were overruns on those projects.

Mr Costello said nobody had lost their job and no contract was ended due to the overrun.

The same contractor, BAM, was chosen to do the first stage and the second stage.

The hospital and centres will have a staff of 3,663, up from the current 3,330, said Ms Hardiman.

The first satellite centre in Connolly Hospital is due to be completed this summer.

The centre in Tallaght Hospital will be ready in the middle of next year.

Questioned by Labour TD Alan Kelly, they said they had told the Department of Health about the first stage of the escalation in cost in the middle of last year. The department confirmed yesterday it was told of the potential increase in construction costs in August.

A spokeswoman for Health Minister Simon Harris said he had been "kept informed" last summer there was work still to be done and the assessment of costs needed to be concluded to reach a final figure in late December.

Once that came through he brought it to Cabinet for approval.

An independent review of how the capital costs were managed is to begin next week and completed in three months.

Irish Independent

Editor's Choice

Also in Irish News