Harris told hospital overruns could reach €400m ahead of budget, documents show

The Minister for Health Simon Harris was told two months before last year’s budget that cost overruns in the development of the national children’s hospital could reach €400 million, new documents reveal.

The Government has consistently maintained that it only became aware of the major escalation in cost in November of last year.

It has also emerged that officials in the Department of Public Expenditure expressed surprise at not being told of the increased costs during the budgetary process.

Further documents show Mr Harris was repeatedly warned as early as 2017 of unwelcome increases in the capital cost of the project.

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A spokeswoman for the Minister said last night he is maintaining his position that he only became aware of the final figures in November.

On September 13th, 2017, Mr Harris was told that developments in relation to escalating costs were “not welcome”.

The secretary general of the Department of Health Jim Breslin wrote of a €61 million increase in costs and said “developments, while being carefully managed, are not welcome”.

At the end of the note Mr Harris writes that the “Government has been very clear on this, [the] project needs to come within budget”.

On August 27th, 2018, Mr Harris was told the “construction budget is trending very significantly over budget”.

Mr Harris was presented with a table of costs, including cost increases which were described as “surprising”. The total increased costs were estimated at €191m.

He was told of separate correspondence from the contractors, BAM, with “substantial additional cost claims” to the value of €200 million, bringing the potential new bill to almost €400 million.

In early September, Mr Harris was told of “grave concerns” about the extra costs and on November 8th, the Minister was told the cost of the project would now be €450m over budget.

A timeline showed that despite reducing the €200m claim from the contractor to €60m, there would still be a massive overspend.

The Minister for Finance Paschal Donohoe has previously said it would have been preferable if he had been informed of the escalation sooner.

Documents show that officials in his department were unaware of the developing crisis.

“While Jim Breslin signalled that some work was being undertaken on this during the budget discussions in early October, this is the first material we have received in relation to a very significant budgetary over-run. As you know in the past we have voiced serious concerns about the governance of the children’s hospital project, and were assured that the arrangements in place were sufficiently robust.”

Fianna Fáil TD Michael McGrath said the latest revelations are “extremely worrying” and called for the Taoiseach to provide further explanations about the controversy.

Labour TD Alan Kelly said he believed Mr Harris’s story was changing. “We know now he was aware of a potential increase in costs of €391m in August. Why did Minister Harris not reveal this when he was under questioning with me and my colleagues. Fianna Fáil has a real decision to make. They were misled in budget negotiations and in confidence-and-supply negotiations. How Fianna Fáil can continue in a confidence-and-supply deal while they have been misled is unbelievable.”

Sinn Féin have said Mr Harris should now be removed from his role.

Speaking in the Dáil yesterday, Minister for Children Katherine Zappone also expressed her own concerns. “I know there are outstanding questions, and we have to get to the bottom of them. As an independent member of this Government, I want answers as well.”