The cost of the national children’s hospital (NCH) could, it has been suggested, rise to more than €2 billion due to issues caused by the war in Ukraine, Brexit, the Covid-19 pandemic and disruption to the global supply chain.
Minister for Health Stephen Donnelly confirmed before Easter that the total programme costs had risen to €1.73 billion, up from the €1.433 billion capital budget approved in 2018.
In a series of replies to parliamentary questions and to priority questions in the Seanad, Mr Donnelly and Minister of State Frank Feighan both accepted that the hospital project was “not immune to these external challenges”.
“Every effort is being taken to mitigate the risks but these externalities are beyond the control of the contractor and the [NCH development board] make speculation and more definitive forecasting unwise,” Mr Donnelly said in a recent reply to a parliamentary question.
Mr Feighan told the Seanad: “The invasion of Ukraine will undoubtedly have compounded such issues. As delays are the biggest contributors to cost, everything possible is being done to ensure the project can be completed as soon as possible.”
The contract with the developers has a scheduled completion date of December 2023. If that is met, it is possible that the hospital could open in the second half of 2024.
However, with disruption to the global supply chain and significant inflation in construction there are fresh doubts if the project can be finished on time and on budget.
Sinn Féin health spokesman David Cullinane said on Sunday that the project “costs are continuing to spiral out of control”.
“There are still hundreds of disputes and inflation is driving up costs. The cost could easily exceed €2 billion. The failures can be traced back to the contract and procurement process which failed the taxpayer,” he told The Irish Times.
Mr Donnelly outlined how the €1.73 billion had been arrived at. He said there were costs associated with delays and additional costs in relation to the integration and transfer of the services of the three children’s hospitals to the new sites.
“This includes investment in ICT, a new electronic health record system and the Children’s Hospital Integration Programme (the merging of three paediatric hospitals) including commissioning,” he said.
In a separate reply to a parliamentary question tabled by Mr Cullinane, the HSE disclosed that there were more than 1,000 claims and adjustments submitted by the contractor in relation to items on the contract.
While the overall value was more than €500 million, the amount agreed to date on claims and adjustments was €14.4 million.
The HSE said every construction project, big or small, receives claims and adjustments from the contractor; and this project has been no different. It said the project has “a robust process in place for the assessment of claims and adjustments by the contractor” and has extensive controls to help manage costs.
“These processes help to manage and defend costs so that the project can reach the best possible outcomes,” the HSE told Mr Cullinane.