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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Children’s hospital cost overruns

Summary

Deputy Catherine Murphy raised concern about the escalating cost of the national children’s hospital, the many reviews already commissioned, and the growing number of claims. The Tánaiste defended the hospital board, said many contractor claims had been rejected or reduced, and noted that some disputes were now before the High Court.

I want to talk about the new national children's hospital, that totem to Fine Gael's legendary fiscal prudence. Between 2017 and 2019, 11 separate reviews and audits of the project were commissioned at a cost of €700,000. An additional report was then sought and PwC carried it out at a cost of €450,000. After 12 reports costing €1.15 million, we have learned that the taxpayer will be very lucky to emerge with any change from €1.7 billion for this project. A further review, by the National Paediatric Hospital Development Board and the Department of Health, has been ongoing since last year, and the Minister for Health was given a draft of it in January. In February, the Committee of Public Accounts was told the report would be concluded within weeks, at which point we would have some clarity on what the budget would be, and we could then expect to discuss that at a meeting of the committee.

There appears to be a new approach now that there is a new Secretary General. A recent letter to the Committee of Public Accounts from Mr. Robert Watt stated, "There is an extremely high likelihood that any discussion on costs or dates, however hypothetical, even from the draft stages of the process, would prejudice enforcement of the existing contract and very likely undermine the role of the Development Board in its ongoing engagement with the main contractor." It is, essentially, telling us to butt out, that it is none of our business. According to Mr. Watt, all of the most controversial information about this project, such as the cost and the timeline, is suddenly too sensitive to publish. What a stroke of luck that appears to be for the Department.

Last year, the Tánaiste told the House that if you want to keep the people's trust, you need to be transparent. He needs to be transparent about this. This is a huge project. When the Irish Independent asked him about the escalating cost of the hospital in 2019, he replied that "nobody will think it a poor investment" when it opens. Does he still believe this? Millions of euro have been spent on reviews and further millions have been spent on consultants and PR companies. Tens of millions of euro have been spent on a botched procurement process and 800 claims have been lodged by the contractor, up from 700 just four months ago. There are children in this country who cannot access basic disability services and others who are awaiting surgeries for scoliosis, yet we are building the most expensive hospital in the world. It is obscene.

Nothing has changed with the spec of this hospital since the estimate was calculated at €900 million. What has changed are the delivery time and the price tag. We desperately need the new children's hospital but did we need to build the most expensive hospital in the world by mistake? Will the Tánaiste practise what he preaches about transparency? Does he have any idea what the cost of the hospital will be or what the timeframe will be? Does he have confidence in the hospital development board to manage the project?

Comment on this
Leo Varadkar The Tánaiste Fine Gael

I do have confidence in the hospital board and the Department of Health to manage this project. To answer the Deputy's question, it is my firm view that when this project is complete, few people will think it was a bad investment. Those who have seen the facilities we now have in Blanchardstown and the first phase of that development, namely, the urgent care centre, will see what an improvement it is on the facilities at the Temple Street hospital, for example. The same applied to the Luas, the port tunnel, Terminal 2 and Knock Airport. There were many critics of the investment made in those projects, few of whom even recall today that they were critics. Although when the hospital is built and commissioned, people will change their minds on this, I accept that in the meantime, it will be a controversial story and issue.

On the analysis and costs, the National Paediatric Hospital Development Board has, at the request of the Minister for Health, undertaken an assessment of the project. The board and the Department are nearing the finalisation of this detailed analysis and this will provide the appropriate assurances to the Government that there has been a robust analysis of the way forward to ensure the delivery of a world-class children's hospital. In December 2018, the previous Government approved an investment decision of €1.433 billion for the capital project. Several items are not included in this figure because there is no price certainty for them, nor can there be any for the duration of the project, including construction, hyperinflation and the impact of Covid-19.

Until the analysis work is complete, it would be premature to speculate on any definitive budget or timeline updates. I confirm that no revised estimate has been shared with the Government. Since the analysis relates to a live contract, it is commercially sensitive and must remain confidential to ensure that the contractual relationships are not adversely affected and that the Government gets the best price at the end of the day. Relevant stakeholders will be updated when the analysis is complete.

Comment on this

I do not disagree that the hospital is needed, but I want to quote something else the Tánaiste said. On Newstalk in 2019, he stated: "It's scandalous that the Government - or rather the Government's agents - got the estimate ... so wrong." Nobody is disputing that the hospital is needed. Indeed, the Minister for Public Expenditure and Reform, who is sitting behind the Tánaiste, wrote to the Minister for Health seeking an update and clarity on this. There is widespread concern about the escalating costs and the escalating number of claims.

We were given an assurance that the hospital development board would appear before the Committee of Public Accounts and the Joint Committee on Health. There does not seem to be any clarity on this. What seems to have changed is that there is a new Secretary General in place, who is giving cover in respect of the board's appearance at these committees, saying that even a hypothetical discussion of this matter will prejudice the project. Have the vacancies on the board been filled? If not, an under-strength board is hardly what is required for a project of this size that has been out of control.

Comment on this
Leo Varadkar The Tánaiste Fine Gael

Regarding the claims made by the contractor, the contractor submitted more than 800 claims for additional money for this project. The board is disputing and defending those claims. It has been extremely successful in discussions and arbitrations in ensuring most of the claims made by the contractor have been rejected and, in some cases, reduced very significantly. Indeed, there are now four cases before the High Court, which forms part of the management process. As those matters are before the High Court, I cannot say much more about them. Suffice to say, the board is defending the State against claims and has been very successful, at least so far, in defending our interests against the contractor in that regard.

When it comes to the issue of vacancies on the board, there is a campaign on stateboards.ie for a new chairperson. Applications closed on 14 May and the Public Appointments Service, PAS, will work through them in the coming weeks. In the meantime, Mr. Tim Bouchier-Hayes has taken on the role of interim chair. On 23 February, the Minister appointed two new members to the board from an existing PAS panel. There are three vacancies and a panel selection for ordinary members of the board will be established as soon as the new chairperson is appointed.

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