The cost of the children's hospital is out of control. I laid out last night what I see as being at the root of the problem. How many variations have there been since this contract was awarded? What is the value of the different variations? How many more variations might the Government be expecting? The procurement process should have delivered the correct form of contract but it did not happen.

The Government has used a fixed-price contract and for that one must have a well-defined scope of works or the claims will come. We do not have a well-defined scope of work because, as I said last night, it is almost impossible with a complex engineering project such as a hospital, so the claims are coming, and we are only starting. We needed a bespoke civil engineering remeasurement contract but we did not get it. As I said last night also, in that situation the contractor does the work, it is measured and one pays accordingly and lets the quantity surveyors sort out the differences. The contractor looks at what avenues he has to make extra money.

The Taoiseach passed a comment about the low balling of contracts. He was a little on the naive side with his comment. I would argue that right now for BAM it is like picking apples in an orchard and that is a big problem for the Government. The legal firm is the adviser on how one procures and amends the tender documents and it has a duty to alarm its clients of the consequences of using standard documents such as those in the capital works management framework because they can only facilitate a fixed-price contract and they do not suit a job such as this one. That gives unbelievable potential to the contractor to get extra money as it goes. The legal firm is a construction specialist. It is not true that it does not know. It should know. That is part of its job. It did not have to rely on the capital works management framework, which the Department of Finance gives it. It had other options. I am seriously concerned with its performance and I think its professional indemnity should be considered. This is not good enough and it will cost the Government too much money. At this stage in the contract the Government has the potential for termination at will. It excludes loss of profits.

I thank the Deputy.

The cost of calling a halt is in the contract. We have not reached the point of no return. We are really only starting. The extra cost we are looking at now will be far exceeded in time if the Government continues along this road. The Government needs to stop and retender.

I note the Deputy's very constructive engagement on this issue in the House and the obvious experience he has in the construction industry which makes for a very helpful contribution. A process is under way now to fully evaluate what happened. Mistakes were made. There was a gross underestimate of the-----

It is the wrong site.

-----cost of building the hospital. When the estimate was corrected, there was a dramatic change in the overall predicted and estimated cost of delivering the hospital. When we got clarity on the figure, the Minister brought a series of recommendations to the Government to make a decision on to how to proceed. I think he made the right decision to do that. What Deputy Wallace is focusing on, understandably, is how we got there, how we learn lessons from that and how we change systems in the future for project management or tendering processes for big projects such as this one. The Government is listening-----

It never listened-----

Shush.

-----to ensure that we learn lessons from the mistakes that were made. We have asked an independent firm, PwC-----

It has no expertise.

Deputy McGrath should please not interrupt.

Of course it has expertise, Mattie.

Not in this area.

What I respectfully suggest is that we, as politicians, have limited expertise in this House to make the right judgment calls in relation to this project. Our job as legislators and policymakers is to put structures and systems in place that ensure underestimates such as this do not happen in the future. By and large, when one looks at many of the other big projects that have been delivered, our systems have worked. I refer to the N17, the N18 from Gort to Tuam, the N11, the N7, the north docklands sewerage system and the Phoenix Park tunnel. I could go on. There are lots of projects on time and within budget because the systems have improved significantly from seven to ten years ago when many projects went over budget. Something has gone wrong in relation to the estimation of cost of the children's hospital. We intend on getting to the bottom of that and learning lessons from it, and we will change systems where necessary in response to that to make sure it does not happen in the future. Of course we will take on board the constructive criticism, concern and suggestions that are made in this House. I do not think it is helpful to start naming individual firms in this House and to start apportioning blame before we have the full, clear picture of what happened. I will certainly not get into that space.

The Tánaiste is talking about learning lessons for the future, but I would like him to learn them for the present because I would argue that if the Government stops now, which it is allowed to do according to the terms of the contract, and retenders, it could save itself in the region of €500 million. The Government should opt for a remeasurable contract rather than stick with a fixed-price contract which will cost a lot more than €1.7 billion. I have already said that I do not expect the overall cost to stop at €2.2 billion.

I know value for money is a concern for the Government. I checked the Government's public spending code. One of the questions it asks is whether the Government is doing the right thing, namely, spending money to achieve the right objectives. I would say "Yes" because the Government is looking to provide a hospital that is required. The second question relates to doing it right, namely, spending money as efficiently as possible and avoiding waste. I would say "No" the Government is not doing it right. I accept that we will learn lessons for the future, but let us learn them for now. The Government can save itself a lot of money by stopping the project now and going for a retender. I am not interested in looking for heads either, but I ask the Tánaiste to look at the legal process and the conflict of interest between the board and the legal firm involved.

I thank the Deputy.

I would look at the performance of the legal firm because it is crucial to what we have ended up with.

We have undertaken a process now that will examine those issues and we will come back with a report to the Government which we will publish. Following that, we can have a debate in this House in terms of the actions we should take on the back of that.

We have two challenges. First, we must get a children's hospital built. The current health infrastructure for children in this country is not good enough. Most parents in this House will know that if their child has required specialist paediatric care. We must improve the infrastructure. We will build one of the most advanced children's hospitals in the world. We are committed to doing that.

It is in the wrong place.

There have been numerous false dawns in terms of trying to get that done.

Second, we ensure that we get value for money. We must recognise that a significant mistake was made in this process when costs and quantities were being estimated. Those mistakes have been corrected and we now have a more expensive project. As far as I am aware, in terms of the advice to the Government, nobody is suggesting that by retendering we would get this done for less money.

The Government would.

It is important not to make suggestions here without backing them up.

The Tánaiste should please check it.

Yes. My understanding is that the advice to the Government is that retendering the project at this stage, to deliver the same project, would not result in a significant saving of money.

When you are in a hole, stop digging.