Harris says €1.4bn cost of children’s hospital ‘reasonable’

Minister questioned about rising price of project as cost overruns come under scrutiny

February 6th, 2019: Minister for Health Simon Harris TD has told the Oireachtas health committee that he remained unaware of the scale of emerging cost overruns on the national children’s hospital for almost a year. Video: Oireachtas TV

 

The €1.4 billion price-tag for the national children’s hospital is a “reasonable” one, Minister for Health Simon Harris has said.

Asked whether the project represented value for money, he told the Oireachtas health committee the option of continuing with the project, as opposed to retendering it, represented the best value for taxpayers.

Fianna Fáil health spokesman Stephen Donnelly had asked the Minister if he felt the projected €1.4 billion cost represented a reasonable price for building the hospital.

“I do. I wish it could be cheaper, but I do,” Mr Harris said. “If I didn’t, I wouldn’t have pressed go” last December and allowed the project to proceed.

Mr Harris told the committee he remained unaware of the scale of emerging cost overruns at the national children’s hospital for almost a year.

Asked by Mr Donnelly whether he had been made aware by those involved with the project of ongoing cost issues between September 2017 and August 2018, Mr Harris said he was not.

Senior Department of Health and HSE officials repeatedly discussed potential overruns in the project at planning meetings during this time, according to confidential minutes revealed by The Irish Times on Wednesday.

Questions about the soaring cost of the project dominated Wednesday’s meeting the of the committee, the fourth time it has heard witnesses on the issue.

Misleading

Mr Donnelly pointed out the Minister, in answering a Dáil question in mid-September 2018, said the project was within budget and cited a cost of €987 million.

Mr Donnelly said the costs were escalating “to the tune of several hundred millions of euro” at this time. He suggested the Minister’s answer was misleading.

Mr Harris said it was not, but he wished now with hindsight he had added a sentence saying that a process was then in place to “crystallise” the guaranteed maximum price of the project.

He said he rejected the suggestion that he knew at that point the extra cost was “several hundreds of millions of euro”.

Asked about Minister for Public Expenditure Paschal Donohoe’s comment that he would like to have known earlier about the overspend, Mr Harris said he too would have wished this.

“He’s entirely correct. We all would have liked to know about the scale of the problem earlier. The programme board, the secretary general [of my department], the HSE and myself have all flagged the fact that an early warning system about this would have helped.”

In relation to the cause of the cost overrun, Mr Harris said “where we have been badly let down is that the quantities were entirely incorrect. The cost of a widget is still [set]at 2016 [prices]but they need a hell of a lot more widgets.

“What I want to know is who messed that up, who got that wrong and when we know who got that wrong we’re going to take action as a Government, where [we have]powers under contracts or to change the board or personnel.

“The good thing is prices were locked into 2016. The really worrying things were [that]the prices were off. They weren’t decided by you or I. They were decided by professionals paid a handsome fee to get this right.”

Inaction

Declaring himself frustrated by the characterisation of inaction on the issue in August and September last year, Mr Harris said “nothing could be further from the truth”.

It was the end of August before the cost overrun became apparent. His secretary general was on leave so it was early September before the “significant capital issue” emerged.

At that point, negotiations began with contractors to try to drive down the cost. The idea he knew about the maximum price at this point “does not hold up to scrutiny”, he said.

Labour health spokesman Alan Kelly asked why officials of the Department of Health and the Department of Public Expenditure had not met to discuss the issue between September and November 2017.

“The idea the two departments couldn’t sit down and have a meeting beggars belief,” Mr Kelly responded, adding that this was “Fr Ted territory”.