Ireland

Ministers defend ‘mind-boggling’ 2.2bn euro cost for Children’s Hospital

Public Expenditure Minister Paschal Donohoe said it would be the last ‘significant’ top-up for the hospital.

A construction worker at the construction site of the new National Children’s Hospital in Dublin. Picture date: Wednesday October 5, 2022.
Hospital construction site A construction worker at the construction site of the new National Children’s Hospital in Dublin. Picture date: Wednesday October 5, 2022. (Brian Lawless/PA)

The government has defended the overspend at the National Children’s Hospital as the total bill topped 2.2 billion euro, as the half a billion top-up approved on Tuesday was described as “mind-boggling”.

Public Expenditure Minister Paschal Donohoe said that there had been learnings from the Children’s Hospital on how to approach big public infrastructure projects, while Tanaiste Micheal Martin said it would be transformative for children’s healthcare.

Mr Donohoe also said it would be the last “significant” settlement for the hospital, which had an initial estimated cost of 650 million euro in 2014.

Cabinet on Tuesday approved more than 500 million euro in additional funding for the new national children’s hospital, an almost 30% rise on the previously approved budget.

It includes millions of euro for an expected pay-out to the contractor over ongoing disputes, as well as other contingency funding.

During Leaders’ Questions, Sinn Fein leader Mary Lou McDonald called the hospital construction a “long-running debacle” and said the new price tag was an “unbelievable” “and “mind-boggling” cost.

She said it was “outrageous” that the government could not be sure this would be the final cost, and that there was uncertainty that the hospital would be completed by October.

“This debacle shows that the entire leadership of government is asleep at the wheel,” she said.

“As this fiasco goes from bad to worse, children are waiting longer than ever for care.

“Eight out of 10 children are waiting longer than the Slaintecare target for an orthopaedic appointment, parents of children with scoliosis and spina bifida are at their wits’ end as their children wait in agony for life-changing and life-saving treatment.”

The Taoiseach said the facility would be opened this year
Leo Varadkar The Taoiseach said the facility would be opened this year (Oliver McVeigh/PA)

Taoiseach Leo Varadkar said that the hospital would be opened later this year and would begin to treat children next year.

He said that it would be a “state-of-the-art” hospital that would last 50-100 years, and be “comparable or superior” to children’s hospitals in Europe and around the world.

“Cabinet agreed to increase the maximum allocation for the hospital to 1.9 billion capital, that’s for the build, and 0.3 billion current, that’s for the commissioning, decommissioning and transition to the new hospital.”

He said that 1.4 billion euro had already been drawn down for the “huge project across five different sites”.

The Government’s new budget is designed to cover the build of the Dublin hospital and two satellite centres at Tallaght and Connolly, as well as hundreds of millions of euro for technology and the transitioning out of older hospitals.

Mr Donohoe said that the 500 million euro is expected to be the “last significant” payment in relation to costs.

He also said that a number of costs relating to building the hospital are being “vigorously contested”.

“I believe the settlement that we have here is the final significant settlement that we will make in relation to the cost of the children’s hospital. We are going to be continuing to make the case for the taxpayer in the legal process that’s under way now.”

Mr Donohoe said that the Irish State had also learned how to deliver big public projects on time and on budget through its experience with the Children’s Hospital.

He said the Children’s Hospital is why a range of costs and possible risks are published for big projects.

“Because the cost in relation to huge projects like the Metro or like the National Broadband Plan, now reflect the learnings that we have in relation to the Children’s Hospital,” he said on Tuesday.

“So what we are now doing for huge projects such as those is we are publishing a range of costs and we are saying these are the different things that could happen that could influence the cost of projects that take years and years to deliver that are very very complex.”

The site will begin treating children next year, officials said
Hospital construction site The site will begin treating children next year, officials said (Brian Lawless/PA)

Tanaiste Micheal Martin said the new hospital would be transformative for paediatric care in Ireland and that it would represent value for money “in the fullness of time”.

Speaking at a media event in Dublin, Mr Martin said: “I can recall other major projects that did overrun but then, in the fullness of time, people said ‘that’s a great piece of infrastructure’. The hospital will be that.”

Health minister Stephen Donnelly said he was “frustrated” with the rising costs but pointed to site delays caused by Covid-19 and construction inflation associated with the war in Ukraine.

“This is an expensive hospital, it is an expensive design, it is on an expensive site,” he said.

“It is not the most expensive hospital in the world, but it is a lot of money that Irish people are paying.

“What I would say is that there is a silver lining, too – that is, we are getting a huge amount in return for that money in terms of children’s healthcare. This is going to be transformative.”

The Department of Health has defended the project by saying the finished building will provide 300 individual, inpatient, ensuite rooms – each with its own place for a parent/guardian to sleep.

In addition, it will double the current number of critical care beds to 60, and have 93 day beds and 20 dedicated, ensuite mental health (CAMHS) beds.

Theatre capacity will be expanded to 22 theatres and procedure rooms. The building will accommodate five MRIs and 110 outpatient rooms.

The Department said the hospital is now more than 90% complete with the fitout of rooms and the installation of medical equipment under way, and the first roof-top helipad of its kind in Ireland, to be shared with St James’s Hospital, recently completed.

A construction worker at the site of the new children’s hospital in Dublin
New National Children's Hospital to cost more than 1.43 billion euro A construction worker at the site of the new children’s hospital in Dublin (Brian Lawless/PA)

Amid the spiralling costs, the main contractor has made claims worth an approximate total of 770 million euro over the project.

Mr Donnelly said an adjudicator has made decisions on about 645 million euro of the claims and has awarded 2.7% in favour of BAM.

The minister said the 512 million euro in additional funding agreed by Cabinet on Tuesday includes an amount against the final settlement to the contractor, with additional contingency funds.

Mr Donnelly did not give a figure for the final expected figure to BAM but said it was “absolutely not” projecting to cover all claims.

The Department said the hospital’s development board continues to defend robustly the claims “without merit”.

Mr Donnelly told RTE that if BAM meets its own schedule, the hospital will be complete by the end of October.

There will be a commissioning period of at least six months before patients are seen at the hospital, by April and May 2025 at the earliest.

However, the hospital’s development board has expressed concern that the contractor had not fully resourced the project.

Mr Donnelly said there would be no memo for additional funding in the lifetime of this Government.