A review over new children's hospital warns final cost could exceed €1.7bn

Date: 12 Apr 2019

A report into cost overruns at the National Children’s Hospital has warned that the final cost of the project could exceed €1.7bn.

The PWC review found failings around planning and budgeting on the project, and that elements of the design still have to be quoted and costed.

The review also said that an increase in construction inflation to 10% would result in an additional cost of around €97m.

It criticised the hospital board and says some red flags around the spiralling costs were missed.

The report identified a major underestimation of costs, but says it was too late to re-tender when the €400m overrun became clear.

Simon Harris says he will come back to Govt in four weeks with full implementation plan following report on NCH cost overrun | https://t.co/rpEa6oNYkL pic.twitter.com/D24JVnE7LG— RTÉ News (@rtenews) April 9, 2019

Such a move could have led to the hospital not being build or it would have increased costs.

There is also criticism in the report of the quantity surveying around the new hospital.

According to the review, “significant failures” occurred during the crucial planning and budgeting stages.

It found that the project could never be delivered within the financial parameters agreed.

It warned that risks remain with the project and if these are not effectively managed, it could lead to further costs rises in the capital works.

The report was completed last Friday and was sent to the Department of the Taoiseach.

It was tasked with finding out what was known, when and by whom, about the escalating children’s hospital costs.

The review looked at the accountability of the relevant key parties responsible for the financial control of the project.

However, while it examined individuals’ roles, it will not name people directly.

It also assessed the decision-making and oversight around the planning and delivery of the hospital.

The Government is to accept all of the recommendations of the report, according to a spokesperson.

They said Minister for Health Simon Harris and Minister for Public Expenditure and Reform Paschal Donohoe back to Cabinet in a month to outline an implementation plan for each of the recommendations.

Fianna Fáil’s health spokesperson Stephen Donnelly said that while the Government may come out and talk about systems failures, what matters now is getting the costs down.

Speaking on RTÉ’s News at One, Mr Donnelly said he understands the report went directly to the Department of the Taoiseach rather than the Department of Health.

Mr Donnelly said the overrun is already pulling from healthcare services and other Government departments and if it “significantly exceeds” €1.7 billion, we will see further damage.

He said he was interested in seeing how the costs can be brought back down, and a road map put in place for future capital projects.

The Wicklow TD said if the as-of-yet unpublished report does so, then it will have been worthwhile.

Mr Donnelly added that he wanted to see why Irish people are paying far more per room for the new hospital than international norms.

He said his understanding from media reports is that the overrun will exceed €1.7bn.

Meanwhile, Labour leader Brendan Howlin said that it will be important to identify which agencies were responsible for the spiralling costs.

The party’s health spokesman has also said the Department of Public Expenditure and Reform has questions to answer.

Speaking on RTÉ’s Drivetime, Alan Kelly said he had to laugh when he read the report state there had to be a “challenging function” in Government in relation to capital projects.

Mr Kelly said the DEPAR is meant to offer this function and questioned whether they are doing their job.

He said it beggars belief that the Dept was not asking questions about the project.

Mr Kelly said the report makes for “grim reading”, saying most people could have written the main points already.

He added that it is very clear that the costs will escalate, predicting that the project will ultimately cost more than €2bn.

The Tipperary TD said this means any claims by the Government that it is in control and can be trusted with economic management “have gone out the window”.

He also said he does not believe there can be many savings made based on what is contained in the report.

The Labour TD said the Dáil would look to debate the issue next week, saying both Minister Harris and Minister Donohoe would be questioned.

Yesterday, Taoiseach Leo Varadkar promised that the Children’s Hospital would be up and running by 2023.

He said too that health expenditure generally was not going into a black hole and most of the money was well spent.

Separately, Minister for Justice Charlie Flanagan will brief the Cabinet on plans to bring security firms involved in enforcing court orders under the remit of the Private Security Authority (PSA).

Mr Flanagan initiated a review of the laws after the controversy sparked by the eviction of a farmer and his siblings from a  property in Co Roscommon last December.

He will now work with the Attorney General to amend the law.

The changes would mean that enforcement guards will be subject to the training standards and licensing regime of the PSA.

Original article: www.rte.ie

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