Fears grow bill for new children’s hospital may hit €1.4bn

There are growing concerns in Government at the escalating projected costs of the new national children’s hospital which Ministers and senior officials fear could now cost €1.4 billion.

Minister for Health Simon Harris is to bring a memo to Cabinet next week on new cost estimates for the facility which is being constructed on the campus of St James's Hospital in Dublin.

The secretary general of the Department of Health, Jim Breslin, last week held talks with the group planning the development of the new hospital.

Senior figures in Government have confirmed the concerns about the rising cost at a time of strain on both capital and current health budgets, and it is understood the Department of Public Expenditure is particularly alarmed at the rising bill for the new hospital.

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In 2012, the new national children’s hospital was expected to cost €404 million.

By the time the contract was awarded for the St James’s site, it had jumped to €485 million. Two years ago, when an application for planning permission was lodged, it had increased to €650 million.

Satellite centres

Last year, the estimated cost reached €1 billion. Now the Government fears it has jumped again.

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.

Last year, Mr Harris said he expected the project to be delivered “on budget and on time”, by the end of 2021.

However, there has been a jump in construction inflation in the last year, with some sources suggesting that the cost of the children’s hospital project was increasing by millions every week.

In a statement, the Department of Health said that “considerable progress” had been made on the project since the contract was awarded in 2017. It said “a traditional method of procurement was not suitable or realistic for a project of this size and complexity”.

Construction costs

Accordingly, the contract is subject to a two-stage process with stage one consisting of a “scope refinement and value engineering process”, based upon tendered rates, to finalise the Phase B works (above ground).

“There are a number of advantages to this approach. It allowed early phases of work to commence on site while the detail on later phases was being finalised and agreed.

“This process has just recently been completed and is subject to consideration by Government. While it is under consideration, the department is not in a position to provide any further information in relation to the construction costs,” the statement said.

A spokeswoman for the National Children’s Hospital declined to comment, referring queries to the Department of Health.

There have been concerns raised in the Department of Health and the Health Service Executive that the cost of major hospital projects such as the new National Children’s Hospital, the new Mental Health Campus at Portrane in north Dublin, the development of radiation oncology facilities in Cork and Galway as well as the primary care and long-stay residential accommodation programmes will absorb much of the available capital fundings over the next few years, leaving little scope for spending on other areas such as investment in diagnostic and medical equipment and ambulances.