Alarm bells ring as children’s hospital costs spiral

Unclear what €1bn price tag for proposed facility at St James’s in Dublin will buy

An animation shows the plans currently in place for the proposed children's hosiptal to be built on the site of the current St James’s Hospital.

 

The futuristic Royal Adelaide Hospital, which has so far cost €2.2 billion, will use robots to deliver food and equipment to the single rooms of each of its 800 overnight patients when it opens.

However, the South Australian authorities are not sure when it will open. Earlier this month, minister for health Jack Snelling said he hoped a move could be made before the onset of the country’s winter flu season.

Ireland’s proposed national children’s hospital at St James’s in Dublin will not have robots on corridors, but it will join the Royal Adelaide on the list of the world’s 20 most expensive buildings.

The cost has risen constantly.

Indeed, the Irish hospital, projected to cost about €1 billion, will be the second most expensive hospital, and the most expensive children’s hospital, ever built, according to a ranking by architectural data company Emporis.

And the bill could go higher. So far, it is unclear how much of the high cost stems from the complexity of the design, as critics claim, or how much is simply down to the high cost of construction in Ireland.

Equally, it’s far from clear what €1 billion buys, and does not buy. Industry sources estimate the core building costs at €508 million, or €582 million allowing for inflation to 2021. The rest is down to clearance, insurance, risk and financing, but it does not, however, include IT and equipment.

The Royal Adelaide Hospital in South Australia has so far cost €2.2bn and will use robots to deliver food and equipment
The Royal Adelaide Hospital in South Australia has so far cost €2.2bn

Most details are likely to emerge shortly at the Dáil Public Accounts Committee, which has summoned the team planning the new hospital to a meeting amid concerns over the spiralling cost.

Satellite centres

The new hospital will have 473 beds, all in single rooms, and the budget includes the construction of two smaller satellite centres at Tallaght and Blanchardstown.

The cost has risen constantly. It was €404 million four years ago when a review group examined a number of sites. By the time the then minister for health James Reilly awarded it to St James’s, it had risen to €485 million.

By the time the planning application was lodged in 2015, however, the price had risen to €650 million. Now, it is understood to be approximately €1 billion.

This is in spite of the fact that the land comes free.

In Finland, authorities there are planning a hospital of equal size. However, the budget for the Nova children’s hospital is €500 million, local officials have told The Irish Times – and this includes IT and equipment.

It will have 412 inpatient, intensive care and neo-natal beds, slightly fewer than St James’s. Building costs are lower because it is located on a greenfield site away from large urban areas, in contrast to the Dublin inner-city plan.

Meanwhile, a new children’s hospital will open in Helsinki later this year. Costing just €160 million, it will have rooms for 150 patients. Half of the money has come from national and local government, the rest from institutions and donations.

The recently built Alder Hey Children’s Hospital in Liverpool was designed by the same architects involved in St James’s. At 270 beds, it is smaller than the Irish children’s hospital but the cost is €280 million.

Downturn

The price actually dropped by almost €60 million due to a downturn in construction at the time. Opened in 2015, it is located in parkland in a suburb of the city.

One industry source said it was “odd” the price at St James’s had increased so much over the past year, and speculated that the original costing was wrong or that a major item was omitted pre-tender.

The proposed Nova children’s hospital in Finland will be around the same size as St James’s, and is estimated to cost €500m
The proposed Nova children’s hospital in Finland will be around the same size as St James’s, and is estimated to cost €500m

Trinity College construction law expert Deirdre Ní Fhloinn believes the government should have taken time following overruns on the Dublin Port Tunnel and other big State projects to take account of international experience.

“Instead they introduced the standard form public works contracts, which have been criticised for their approach to risk and which are very different to the partnering and collaboration approaches of contracts used on major projects in the UK.”

Excluding equipment, one US industry publication believes children’s hospitals can be built from $400 per sq ft, rising to $1,200 in New York. By that metric, St James’s could cost up to €1.54 billion.

Construction inflation is one reason why the cost of the St James’s project has mushroomed. This stood at 3 per cent in 2014, but has increased to 9 per cent now.

The escalating cost has rung alarm bells, but the Government insists BAM Ireland’s winning tender – the lowest tender offered – is within 5 per cent of projections.

The 10 most expensive hospitals

Albert B Chandler Hospital, Kentucky, US – €427m

Smilow Cancer Hospital, Connecticut, US – €444m

Benjamin Russell Hospital for Children, Alabama, US – €459m

Providence Regional Medical Centre, Everett, US – €475m

Prentice Women’s Hospital, Houston, US – €478m

Texas Children’s Pavilion for Women, Houston, US – €546m

Ann & Robert H. Lurie Children’s Hospital, Chicago, US – €575m

Rush Hospital East Tower, Chicago, US – €621m

New Children’s Hospital, Dublin, Ireland – €1bn

Royal Adelaide Hospital, Adelaide, Australia, – €2.2bn