Sunday 21 July 2019

Eilish O'Regan: 'Questions grow about how jinxed project's costs sky-rocketed to €1.7bn'

  

The cost of the planned National Children’s Hospital has reached a staggering €1.7bn
The cost of the planned National Children’s Hospital has reached a staggering €1.7bn
Eilish O'Regan

Eilish O'Regan

It's difficult not to conclude the new national children's hospital is not jinxed.

Not only has it a wearying history of setbacks, rows about location and delays but it is now at the centre of dispute over its massive cost of €1.7bn. The construction cost is an eye-watering €1.4bn and another €300m is needed to provide it with its IT system and other non-capital essentials.

An extra €450m in that construction cost was not budgeted for when the Government signed off on its build in April 2017 at €983m.

Although the national paediatric board - which has responsibility for the design, construction and equipping of the hospital - along with health officials has appeared before the Oireachtas health committee to account for the overrun, much of the explanation is lost on those who do not have in-depth understanding of construction.

However, several issues have emerged.

Questions remain over the decision to do a two-part procurement process - the first for underground and the other for the actual building.

The first phase constructed by BAM is complete and within budget. It is the second which has fuelled the overrun.

There were already signs of "pressures" as health officials termed it yesterday last August when the Department of Health was notified of a €200m excess in pricing phase two.

In the following months a whole series of costly demands were added on, including €90m due to the finish date being pushed out to 2022.

The board said it decided to give phase two to BAM as well so as not to incur delay by going to tender again.

By November the hospital had a construction price of €1.4bn. The board has defended the two-stage process saying it meant the hospital was able to begin two years early.

It also points out that construction inflation has risen from 3pc to up to 9pc in Dublin in recent years.

An external review costing €450,000 has now been commissioned to get the expert's view on whether the rise was merited or not.

It's difficult not to conclude the officials from the Department of Health and HSE, who were on around four "oversight" committees, took a hands-off approach to the project.

The warning signs emerged in August but there was no evidence yesterday that any actions were taken in the following months to chase how negotiations with the builder were proceeding.

Much was invested in getting the long-awaited hospital built and there may have been a reluctance to intervene and a fear about it being delayed yet again.

But the overrun has huge implications for other hospital and health projects which will have to temporarily shelved because so much capital funding is needed.

Once again the taxpayer is picking up the bill. But this time it is even more serious because of its impact on patients.

Irish Independent

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