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Go-ahead for children's hospital despite spiralling €1.4bn cost was 'least-worst option'

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Health Minister Simon Harris (Brian Lawless/PA)

Health Minister Simon Harris (Brian Lawless/PA)

Health Minister Simon Harris (Brian Lawless/PA)

The decision to give the go ahead to the construction of the national children’s hospital after it escalated in cost to €1.4bn was regarded as the” least worst” option, it was claimed.

Health Minister  Simon Harris and Department of Health Secretary General Breslin, who are due before the Oireachtas Health Committee, described the response to getting the massive bill for the second hospital phase in November.

Both are set to come under pressure  at the committee to explain what level of oversight they had over the cost of the hospital, which is not due to be finished until 2022.

A briefing note to the health committee said the development board of the hospital  submitted its Final Project Brief and Business Case in February 2017.

Government approved the project in April of that year.  In approving the board to proceed the Department and the HSE set the capital budget at €983m, excluding ICT, in line with the its business case.

The development board was advised that the project must be managed within this budget, cost increases avoided and, failing this, offset by amendments to scope.

In September 2017 the board identified €61m in potential increased costs arising from more stringent fire certification provisions, Urgent Care Centre costs and programme alignment amongst contractors to ensure effective project delivery on site.

The board brought forward proposals to address these through reduction in costs and sourcing of additional funding. Agreement was subsequently reached with the HSE and the Department, through the Children’s Hospital Programme and Project Board, on an overall approach.

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Work underway at the site of the new Children’s Hospital. Photo: Mark Condren

Work underway at the site of the new Children’s Hospital. Photo: Mark Condren

In late August 2018 the board briefed the HSE and the Department on developments in relation to the process.

The conclusion  of the process was taking longer than planned, costs “were now trending very significantly over the original costs and the main contractor had just submitted very substantial additional cost claims. “

The development board said the costing of initial work packages was in line with expectations but more recent work packages, in particular mechanical and electrical work, were showing significant escalation.

In September 2018 further updates were provided to the Department on a preliminary basis including the fact that the hospital board  had decided to commission process was concluded on  November 12, 2018 and submitted to the HSE on  November 13.

Following Government consideration in December 2018 the Government decided to proceed with  Phase B works.

“The decision was made in the face of major escalation in cost but having regard to this being judged the least-worst option for the delivery of this priority project,” said the document.

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