National Paediatric Hospital Development Board: Financial Statements 2018

Mr. Jim Breslin (Secretary General, Department of Health), Mr. Fred Barry (Chairman, National Paediatric Hospital Development Board) and Mr. David Gunning (Chief Executive Officer, National Paediatric Hospital Development Board) called and examined.

We have two sessions today. This afternoon, we will meet representatives of the HSE to discuss primary care centres and other matters. This morning, we are dealing with 2018 financial statements of the National Paediatric Hospital Development Board. As we last met representatives of the board on 16 May 2019, it is timely that we are engaging with them again on the management of the children's hospital project and the associated costs of this key capital project for the State. In the committee's sixth periodic report, we made a number of recommendations relating to and arising from our previous meetings on the 2017 accounts. Today's meeting gives us an opportunity to review the progress that has been made in addressing these issues.

We are joined this morning by Mr. David Gunning, who is the chief executive officer of the National Paediatric Hospital Development Board. I think this is the first time he has attended a meeting of the Committee of Public Accounts. He is welcome. Mr. Gunning is accompanied by Mr. Fred Barry, who is the chairperson of the board; Mr. Jim Farragher, who is the board's finance officer; Mr. Phelim Devine, who is the board's project director; and Dr. Emma Curtis, who is the board's medical director. We are also joined this morning by Mr. Jim Breslin, who is the Secretary General of the Department of Health. He is accompanied by Mr. Barry McGreal, who is a principal officer in the new children's hospital unit of the Department, and Mr. Liam Morris of the Department's acute hospitals division. Ms Pamela Carter, who is a principal officer in the Department, and Ms Anna Wallace, who is an assistant principal in the Department, are also in attendance. We are also joined this morning by Mr. Dean Sullivan of the HSE chief strategy office and by Mr. Jim Curran, who is the head of estates with the HSE. Mr. Paul de Freine, who is the HSE's chief architectural adviser, is also in attendance. We are also joined this morning by Ms Eilísh Hardiman, who is the chief executive of Children's Health Ireland. All of the witnesses are very welcome.

I remind members, witnesses and those in the Gallery to turn all mobile phones off. That means putting them into airplane mode. Merely putting them on silent can still interfere with the recording system. I wish to advise all witnesses that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence in relation to a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members of the committee are reminded of the provisions within Standing Order 186 that the committee shall also refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government, or the merits of the objectives of such policies. While we expect witnesses to answer questions asked by the committee clearly and with candour, witnesses can and should expect to be treated fairly and with respect and consideration at all times, in accordance with the witness protocol.

I invite the Comptroller and Auditor General to make his opening statement.

Mr. Seamus McCarthy

As Deputies will be aware, the National Paediatric Hospital Development Board exists to procure the planning, design, construction and fit-out of the new national children's hospital at the St. James's campus in Dublin and of two satellite paediatric outpatient and urgent care centres at Tallaght and Connolly hospitals, respectively. When they have been commissioned, all three facilities will be operated by Children's Health Ireland, which was formally established with effect from 1 January 2019. To date, the development board has been funded fully by State grants provided by the HSE. In 2018, the board's expenditure amounted to €127.6 million, representing an addition to the value of fixed assets recorded in the financial statements. Total accumulated project capital costs to the end of 2018 amounted to just under €260 million, inclusive of VAT.

This does not include an amount of €35.5 million written off by the board in 2013, following the decision to switch the location of the hospital.
The board’s financial statements are prepared in accordance with financial reporting standard, FRS, 102, but with one exception directed by the Minister for Health. In common with other public sector health bodies, the Minister requires that pension entitlements earned by employees are accounted for as they become payable. The reporting standard requires that such obligations are recognised in the period when they are incurred. I am satisfied that the financial statements give a true and fair view of the board’s affairs, except for that one departure from the standard, but I am obliged to give a qualified audit opinion in the circumstances.
The financial statements were certified by me on 24 October 2019.

Mr. Fred Barry

I thank the committee for inviting us here this morning to discuss the National Paediatric Hospital Development Board, NPHDB, financial statements 2018. I am joined here today by Mr. David Gunning, chief officer, Mr. Jim Farragher, finance officer, Dr. Emma Curtis, medical director, and Mr. Phelim Devine, project director.

The National Paediatric Hospital Development Board was appointed in 2013 to design, build and equip the new children’s hospital. A planning application was lodged in 2015 and An Bord Pleanála granted planning permission in 2016 for the new children’s hospital, and the two paediatric outpatients and urgent care centres - one already complete and operational at Connolly Hospital in Blanchardstown and a second under construction at Tallaght University Hospital.

Following the approval of a guaranteed maximum price in December 2018, the NPHDB provided the Committee of Public Accounts in January 2019 with a breakdown of costs approved by Government for the design, build and equipping of the new children’s hospital. The agreed investment decision is €1.433 billion. The investment decision approved at the time was exclusive of residual risks as was communicated at the time of approval. These exceptions were also set out within the PwC report published in April. As pointed out by PwC, some of these risks are under our control and some are not. We are actively managing those under our control while monitoring those that are not.

The 2018 accounts were audited and approved by the Comptroller and Auditor General on 24 October 2019. The expenditure as at 31 December 2018 for that year on the design and build of the hospital was €127,603,801. An analysis of expenditure to 31 December 2017 and 2018 is included in the opening statement submitted to the committee.

I would like to take this opportunity to give members an update on the construction progress; those of you who have had the opportunity to visit the site of the new children’s hospital – or indeed any of you that have passed by the site recently - will have seen the progress that has been achieved. Across the 12 acre site the excavation, piling, and the structural frame to the underground basement for campus-wide facilities management, energy centre, and the 1,000 space underground carpark are nearing completion and the first window has actually been installed in the hospital. Well over 1 million sq. ft. of slabs have been poured. Mr. Gunning will give the committee some further detail on the construction shortly. The outpatient and urgent care centre at Connolly Hospital in Blanchardstown was handed over to our colleagues in Children’s Health Ireland for operational commissioning earlier this year, and since we last met services have commenced there.

Since I appeared before the committee in May, there have been a number of changes in leadership, and in relation to project governance. Following a competitive process overseen by the Public Appointments Service, Mr. David Gunning was appointed as chief officer in September and Mr. Phelim Devine was appointed project director in October. We have additionally added to the capabilities of the project team by engaging expertise in a number of areas. We have reorganised the board committee structure to focus our attention on what will be our critical challenges over the coming years. As a result of the resignation of a number of board members this year, there are vacancies on the board. These positions were advertised via the Public Appointments Service, and we understand that a shortlist of potential candidates will be submitted to the Minister in December.

We report to the children’s hospital project and programme, CHP&P, steering group on a monthly basis, providing comprehensive updates on all aspects of the project, and we also report to the CHP&P board.

Can Mr. Barry explain who or what those groups are as the public would have no concept? We thought Mr. Barry was over the children’s hospital project and programme steering group and now he tells us otherwise.

Mr. Fred Barry

The development board is over the day-to-day running of construction, building, equipping activities. There are quite a few different strands in the development of the hospital, including our colleagues in Children's Health Ireland who will operate the hospital; there is input on the ICT side from other parties and there are many issues around staffing and so on. There is a very broad array of interests and stakeholders in the project. There is considerable interest in the project on all fronts from the Department of Health and the HSE and that reports right up to the Minister. There is a steering group which meets monthly to track and co-ordinate progress from all the different parties including ourselves but going far beyond ourselves and a board oversees that.

What is the name of the board that oversees the steering group?

Mr. Fred Barry

They both have rather long titles of the children's hospital project and programme with one, the steering group and the other, the board.

Mr. Barry reports to the steering group which reports to the board.

Mr. David Gunning

We report to the board but the steering group is a function of the ongoing -----

Where does the Department of Health come in?

Mr. Fred Barry

That is for the Department of Health to answer.

I am sorry to interrupt but the public are totally confused about all these different titles when there are so many groups involved.

Mr. Fred Barry

I am not surprised.

Will Mr. Breslin give some clarity on the structure?

Mr. Jim Breslin

I chair the programme board. Its constituent elements are myself, the CEO of the HSE and Dean Sullivan, as chair of the steering group. We invite in CHI and the national paediatric development board to update us at those meetings. Mr. Sullivan chairs on a monthly basis -----

Slowly, for us. How many are on the programme board?

Mr. Jim Breslin

There are four permanent members and others are in attendance.

They are brought in. Sorry about this but we will be lost if we do not get this right. Who are the four again?

Mr. Jim Breslin

I chair it.

Mr. Breslin.

Mr. Jim Breslin

Paul Reid.

Paul Reid.

Mr. Jim Breslin

Mr. Dean Sullivan, deputy -----

Who is Dean Sullivan with?

Mr. Jim Breslin

He is deputy CEO in the HSE but he also chairs the steering group underneath it. The assistant secretary, acute hospitals division, in the Department is also on it.

It is the secretary of the Department. What is that person's name?

Mr. Jim Breslin

Ms Tracey Conroy.

Is Mr. Breslin telling me that Children's Health Ireland is not on the programme board for the national children's hospital?

Mr. Jim Breslin

It is in attendance.

So they are not members of the board. I just want to understand this. The national children's hospital, Children's Health Ireland are not on the board that is over the programme board.

Mr. Jim Breslin

This is an oversight mechanism, not the delivery of the project. Those delivering the project, both the CEO of Children's Health Ireland and the CEO of the National Paediatric Hospital Development Board, account to those structures for where they are at in relation to delivery. It is separate from delivery and is to oversee and ensure that it is up to date on any issues and we are fully advised on what is happening on the project.

But Children's Health Ireland is ultimately going to run the hospital and Mr. Breslin is telling me it has no role, it does not have a member on the board overseeing it.

Mr. Jim Breslin

No, because then it would be accountable to itself. It is responsible to the Department, as the sponsor of the project and the HSE as its funder. They account on the programme that they are delivering. They are not accountable to themselves and are not members of the group.

But they will run the hospital at the end of the day. Should it not be running this project? Should it not be the key group on the board if it is going to run the children's hospital? Forgive me for asking what might seem like a strange question to Mr. Breslin.

Mr. Jim Breslin

Children's Health Ireland and the paediatric hospital development board have statutory responsibilities.

They go away when the building is handed over.

Mr. Jim Breslin

The development board goes away and CHI stays there forevermore running the hospital.

They are the people-----

Mr. Jim Breslin

Exactly.

-----to oversee the children's hospital in the long term.

Mr. Jim Breslin

Yes. They have that statutory responsibility but the HSE, as funder, and the Department, with the responsibility it enjoys, need to oversee that and make sure it is being performed correctly. We have put a structure in place to make sure that is happening. Otherwise we would be having ad hoc meetings, calling people in, not having a proper structure to it. This is the structure that we use. We minute the meetings. We do a full review of the programme as it is when we meet and we look at issues that are coming up or on the horizon.

When the hospital is functioning, because people want to know, will CHI report to the programme board in the long term?

Mr. Jim Breslin

CHI, just like Beaumont Hospital and St. James's Hospital, has its own.

They are section 38 bodies.

Mr. Jim Breslin

And so will CHI be. It will be a statutory body.

Let us start again. CHI is a section-----

Mr. Jim Breslin

It is a statutory hospital. It is a public body funded by the HSE under section 39 of the Health Act.

Is it a HSE hospital?

Mr. Jim Breslin

No.

Is it like Tallaght? Is Tallaght a HSE hospital?

Mr. Jim Breslin

No.

What HSE hospital is there in Dublin?

Mr. Jim Breslin

St. Columcille's.

Mr. Seamus McCarthy

St. James's.

Mr. Jim Breslin

It is closest to St. James's or Beaumont Hospital, which is, a public body put there by statute of the Oireachtas, with appointees made by the Minister and which receives its funding from the HSE, because the HSE has overall responsibility for the entire health service.

Children's Health Ireland will be a section 38 organisation, not run by the Department of Health. It will have its own board-----

Mr. Jim Breslin

It has its own statutory board.

-----and will get the funding from the Department of Health.

Mr. Jim Breslin

It will be audited by the Comptroller and Auditor General. It will report here as an accountable body to the Committee of Public Accounts.

I was merely clarifying that. I do not know whether that is good or bad. It is merely information I want to put out there for people because we get lost with these long titles.

Mr. Jim Breslin

We probably will come into it in the meeting, but I might just note that we will revise those structures. We have already looked at those structures. We will look at the work that is being done by the Department of Public Expenditure and Reform on the public spending code. When that is completed, we are likely to streamline those top-level governance structures, not the CHI or the development board but how we oversee it. We will take account of any learning.

We just had a note from Mr. Robert Watt of the Department of Public Expenditure and Reform, DPER, on the new spending code pending approval. We have to cover that on another topic.

I apologise to Mr. Barry for the interruption.

Mr. Fred Barry

Not at all.

That is my habit. If there is something that I do not understand, I will try and add a bit of clarity. It is important so that we understand the structure.

Mr. Fred Barry

I had come to the end of my little spiel anyway. I would now like to introduce our recently appointed chief officer, David Gunning, who will introduce himself a little further and provide more detail on the construction update.

Mr. David Gunning

I thank Mr. Barry. I thank the Chairman for his welcome.

I thought, building on what Mr. Barry has pointed out here, that I would show some photographic evidence, if that can be put up on the slides here. It is there. We sent it in in advance just to show here. I have a number of photographs and I would just like to talk the members of the committee through the work that is going on.

For an orientation point of view, the first photograph is taken from the north end, looking south towards the Dublin mountains. One can see in this photograph, starting on the right-hand side, this U-shaped road which comes in from South Circular Road, comes all around the perimeter of the children's hospital site and eventually appears over on the left-hand side into St. James's. That is the new access road, into the hospital and into the St. James's campus.

It is vehicular access.

Mr. David Gunning

I beg the Chairman's pardon.

There are no cycle tracks or anything on this for pedestrians.

Mr. David Gunning

There is a pedestrian footpath. This is access for the emergency services, in and out, and all traffic, in and out.

This is a view of the 12-acre site. One does not get to see a lot on this and I guess the access road is the key point.

I would like to move on to the next slide. This is taken, again, looking in that same direction, but the key point here is we are starting to see a hospital emerging from the building site. To talk about some of the areas here, one will see the area, "Concourse", that is labelled there in the centre of the photograph. That will be, if you like, the main street up through the hospital. One may remember that from previous presentations or models. Again, to emphasise, that street is the length of Grafton Street, as a reference point. Off that street, there is a multi-storey on each side. We see on the left, going from bottom to top, we have the decontamination unit, radiology above that, critical care and then the various therapy rooms along that. On the right, these are the fingers that one will notice if one drives by the South Circular Road. They will be the outpatient departments. Above that, we have cardiology, a surgical ward or other therapies, and the haematology and oncology ward on the top, and others will go on top of that. Down on the bottom left, one will see a plant room is being constructed. That is the location of the former access road, which has now been practically fully excavated. That is a recent milestone that we have passed. That plant room there will provide energy and various other services to the building. Again, to emphasise, we are starting to see a hospital emerge from the building site.

If I could have the next one, please. It is hard to see some of this in red. Again, to show the scale, one will see the workers in the foreground there laying out reinforcing bar, rebar, in advance of a concrete pour. Right above them, one sees B2, which is basement 2, basement 1 above that. There is lower-ground floor, ground floor, levels 1, 2, 3 and 4. Just beside the "L" on level 4, one starts to see some columns emerging that are the start of the supports for levels 5, 6 and 7. An enormous amount of work has been achieved. I will say probably the progress is not as much as we would like but we are making quite considerable progress. That gives the scale from basement 2 all the way up to what has been done.

The next slide shows the view if one drives along South Circular Road. The old entrance is where that traffic warden is on the left-hand side at the break in the timber there. Again, one can see these three different figures that stick out. What one cannot see because of the scaffolding is that we now have facade going up on these particular buildings. Mr. Barry mentioned there is one window in. Now tens of windows have gone in, even in the past week. There is quite a lot of progress. The outpatients are over on this side. Gardens will be on top of this to provide a healing environment for the children and their families. I mentioned previously the haematology and oncology there on the left, as that will go three more storeys on top of those fingers for the wards and other locations.

The next slide gives another view. There is a lot of scaffolding there which is paving the way for facade, insulation, etc., that get affixed to the structure along with the windows. That is the north block, which is probably the slower part of the build but is moving along now at a fair degree of pace.

The next slide shows the view from close to the offices that we occupy in Herberton, beside Fatima Luas stop. The Luas runs along there from left to right and the other side of the fence is our view of the building. To the left of that will be where the helipad is located and in there we see a so-called "linear park", which is a development along the Luas which provides a nice environment there for the local community.

On the next slide, just going into some of the mechanical and electrical detail, a lot of work has been done in this particular area and it is not all just concrete and steel. On the left-hand side, one can see lagged pipes up towards the top with the silver coating on them. Those are all for steam and hot water. On the fire protection in the centre, the red pipes are the already-installed sprinkler system for the areas that have been developed.

A large number of air handling units have been installed in the level two basement, which will provide ventilation and various other services related to air quality in the entire hospital. Basement level one is a car park and is practically complete, only requiring some lining up and finishing. The final slide shows the orientation of the hospital from a height. As one looks through the main street of the hospital, one can see in the distance, if one's eyesight is very good, a couple on the roof of the Royal Hospital in Kilmainham. This will all be enclosed eventually. These photographs are two weeks old. We had a presentation from the design team on Tuesday that showed even more progress than we are showing here today. I wanted to share those photographs with the committee to give an indication of the progress made to date.

As I went through the slides, I spoke about insulation. The sustainability of the hospital has been raised in the past. I wish to emphasise that the hospital is being built to the highest standard set out by the Building Research Establishment, BRE. It will reach the "excellent" rating for energy performance and sustainability or the building energy rating, BER, A-3 standard. This means that there will be a 60% to 70% reduction in the energy costs of this hospital in comparison to the existing hospitals being operated by CHI, which is significant.

Mr. Barry mentioned the outpatient and urgent care centre at Connolly Hospital and construction is also ongoing at Tallaght University Hospital. The CHI unit at Connolly is open and is delivering services. Almost 2,000 children have attended urgent care clinics and 1,000 outpatient appointments have taken place since the opening.

The images do not convey the full reality of what is going on and the scale of it. In that context, we would be delighted to host a visit from the committee as a group or as individuals. That invitation stands and we would welcome such a visit.

The first speaker to indicate was Deputy Imelda Munster, who has 20 minutes. We will have a second session in the afternoon and will have a different opening speaker for that session. Before I go to the Deputy, I wish to make one observation. This is the Committee of Public Accounts. The witnesses have told us that the agreed investment decision or agreed maximum price of €1.433 billion was approved last December.

Mr. Fred Barry

Yes.

Here we are, 12 months on. We have had the opening statements from our witnesses but not a solitary figure has been presented other than the one presented here 12 months ago. That is all I am saying and we will come back to that during the meeting.

Mr. Fred Barry: I would be happy to respond to that now.

I presume the witnesses understand my point.

Mr. Fred Barry

I would be quite happy to respond to that now.

Please do because it just struck me that we received no up-to-date information, other than the photographs.

Mr. Fred Barry

Okay. Perhaps that was an oversight on my part. I had understood that because we were looking at the 2018 accounts, the figures included should only be for that year. I can tell the committee-----

Yes, but we will want updates.

Mr. Fred Barry

Okay. I can confirm that-----

I stress that this will not cut across Deputy Munster's time.

Mr. Fred Barry

We are here, one year later and we are still within the €1.433 billion budget as set for us last year.

You said that.

Mr. Fred Barry

Yes. I am saying we are still within it. The budget was set last year and the Chairman has asked for an update as to where we are now. I am saying that we are still within the budget as set for us last year.

What about the issues referred to? Mr. Barry said that some risks are under the board's control and some are not. We are interested in the items that are not in the €1.433 billion budget, which will ultimately be a cost to the taxpayer. There seems to be a suggestion that these items are separate from the €1.433 billion budget but these are the items with which we are concerned. We want to know about the issues that are not in the budget.

Mr. Fred Barry

Understandably.

Mr. Barry has said that there is a budget and so far, the project is within that budget. However, that budget is not the full budget at all because there are lots of issues outside of the board's control. He has not said a single syllable about them. That is important in the context of our role. I am just making that point because I want the other members to come in. I do not want to take over the meeting but I hope Mr. Barry understands the point I am making about the opening statements.

I wish to echo the Chairman's comments. I have a concern as well because what we got was a presentation on the build which is nothing to do with our job. That is for the health committee. The witnesses are before the Committee of Public Accounts and what we expect is up-to-date information on costs, with proper breakdowns. We have many questions and I hope we will get the answers. If we do not get those answers today, then I do not know why Mr. Barry has come in. He and his team should have been aware of what this committee does and what it expects of witnesses who come before it. Given what I have just heard and the questions put by the Chairman, I have concerns but I will reserve judgment until I put my questions. I hope that when I do so, I will get an adequate response.

Given that the Chairman has opened the meeting up to comments-----

Yes, but I ask the Deputy to be brief. I apologise to Deputy Munster, who is the main speaker. This is not normal procedure.

I am delighted to hear that windows are being opened and a hospital is emerging. That is what we all want. However, what we are here today to do is determine if accountability is emerging. I would appreciate the witnesses bearing in mind when they are answering questions that we are interested in the process of accountability in the context of the overspend. I hope they can zoom in on that rather than just showing us lovely pictures.

What we are referring to is under the 2018 accounts. Note No.11 in the 2018 accounts on page 27 refers to contingent liabilities. Those liabilities are not quantified. Liabilities have been incurred, the value of which has yet to be determined. This is referenced in the 2018 accounts. We need details, fleshed out, on what those contingent liabilities are in respect of accounts signed off 11 months ago. They are relevant to the 2018 accounts and we need to know more about them. I am sure the witnesses can see where we are coming from. Deputy Munster has the floor now, with my apologies.

I thank the Chairman. The witnesses are all very welcome. I will start with Mr. Barry if I may. Has there been any revision of the projected final cost since the figures were published in the PwC report last April?

Mr. Fred Barry

No. There are residual risks which are outside of the approved budget. We have said previously and I repeat that it is very likely that some of those risks will come to pass but they have not hit us as yet during this year. We have, therefore, not gone back to the Government and said that some of the residual risks retained by the State have occurred and we need more money against those. That has not happened, at least as yet.

The board has not revised the-----

Mr. Fred Barry

We are still within the €1.433 billion authorisation.

Can Mr. Barry explain how he can say that the GMP for construction is €1.433 billion or that the entire cost is €1.7 billion when we know that contractors' claims are being submitted on an ongoing basis?

Mr. Fred Barry

The contractors' claims are going in on an ongoing basis and a number of those claims have been through the process. The process with contractors' claims is that if they are not agreed, they are referred to the employers' representative for determination.

I know that and I know that there is a process of 20 days-----

Mr. Fred Barry

The Deputy knows the process-----

-----and ten days.

Mr. Fred Barry

Okay.

What I am saying is that those contractors' claims are being submitted on an ongoing basis. Mr. Barry said that currently approximately 50% of those claims have been processed. Most of them were the smaller claims. The other 50% of claims are outstanding and further claims will be submitted over the next three years and beyond. In that context, how can he say that there is a GMP when contractors' claims are being submitted on an ongoing basis and will be for years to come? He said recently it could be 2024 or later before the final accounts are ready and we know what is what.

Mr. Fred Barry

That is correct.

Where does the GMP come in? The process makes a nonsense of that, does it not?

Mr. Fred Barry

I suppose. The GMP arrangement with the contractor is a price from him for work as described in the contract at that time.

It does not preclude the contractor for submitting claims based on anything that the contractor may feel is outside of that price.

Does Mr. Barry expect further overruns?

Mr. Fred Barry

So far, we have been able to combat and resist all of the claims. We are representing the public interest in doing this, but we have been able to resist them and make the case that the guaranteed maximum price is already included for the items claimed by the contractor. Whether or not we will succeed in that for the next three years with all of them, I really cannot say. I know we are going to keep arguing, keep making the case and keep fighting them as resolutely as we can.

I think what Mr. Barry is saying is that he cannot guarantee that there will be no further overruns, even with the guaranteed maximum price in place? Is Mr. Barry telling this committee that he cannot guarantee-----

Mr. Fred Barry

I am certainly saying to the committee that I almost expect that on some of the residual risks - the ones retained by the State - there will be costs involved against them. For example, the State has retained risk on inflation over the 4% level.

Just on that-----

Mr. Fred Barry

It is a virtual certainty that there will be additional costs associated with that.

At the health committee last week, Mr. Barry put forward the argument that no one can predict and that it was impossible to know what way inflation would go. One of the members speaking to Mr. Barry was aghast that he did not have some business case or a model to determine it, but he made reference to the fact that the PwC report gave a range for inflation and that was all the board had done. Mr. Barry made reference that the PwC had given a range for inflation, but in the minutes of the most recent meeting of the board, which is online, it says the board discussed the risks associated with inflation.

Mr. Fred Barry

Yes.

The next two paragraphs are redacted. I am wondering is the redaction in relation to the discussion around the risks associated with inflation. The headline is the board discussed the risks associated with inflation, and then there are two paragraphs redacted. Was that the case?

Mr. Fred Barry

Excuse me, was what the case?

Is the redaction in relation to the discussion around the risks associated with inflation?

Mr. Fred Barry

With respect, something has been redacted by the information officer and I am not really going to say what it was. I do not think that would be appropriate.

I am asking because every other headline includes the discussion that took place, except for the redaction under the headline, the board discussed the risks associated with inflation. Every other headline-----

Mr. Fred Barry

It did.

-----includes the discussion. Was the redaction in relation to the discussion around inflation?

Mr. Fred Barry

If the matter was redacted, and the information officer redacts items for reasons of confidentiality or commercial sensitivity-----

Okay. In relation-----

Mr. Fred Barry

It is not for me to unredact it.

Okay. Mr. Barry is presuming it is around commercial sensitivity, that that would be the only logical reason for the board to redact it.

Mr. Fred Barry

It would be a confidentiality or a commercial sensitivity issue.

Commercial sensitivity.

Could I just have clarification around construction inflation and whether or not it is deemed commercially sensitive? Could I ask through the Comptroller and Auditor General to confirm if construction inflation - one is talking about the general industry as such - would be deemed commercially sensitive?

Mr. Seamus McCarthy

My understanding would be that indices of construction costs would be in the public domain.

It would not be deemed commercially sensitive at all.

Mr. Fred Barry

I would agree with that completely.

Mr. Barry has just said it was commercially sensitive.

Mr. Fred Barry

No, I-----

No, Mr. Barry said there were two reasons, confidentiality or commercial sensitivity. The Comptroller and Auditor General has just ruled out commercial sensitivity as a reason, so what is the reason? Why is there a redaction?

Mr. Fred Barry

With respect, the Comptroller and Auditor General said, and I fully agree, that public indices and indices that are in the public domain around inflation are not confidential, and I am not suggesting that they are.

Mr. Barry referred to commercial sensitivity. Can the Comptroller and Auditor General confirm that again, because there seems to be a little bit of confusion? Is there any train of thought or any aspect where construction inflation could be deemed commercially sensitive in the wider sphere of things?

Mr. Seamus McCarthy

Publicly available information is obviously not commercially sensitive, and there would not be a need to redact that. I do not know what is in the paragraphs.

None of us does, because they are redacted.

Mr. Seamus McCarthy

That is obviously the point.

Why would this information be redacted? Is it to save blushes?

Mr. Fred Barry

There are no blushes on our part over construction inflation.

Good, so was the discussion-----

Mr. Fred Barry

Why would we be blushing over construction inflation?

It was the fact that it was redacted, and Mr. Barry said a moment ago there were two reasons for it being redacted, and one of them was because it was commercially sensitive. Now that has been rubbished.

Mr. Fred Barry

Excuse me, it has not.

What was the other excuse Mr. Barry gave?

Mr. Fred Barry

Deputy Munster is making the assumption that what was being discussed was the publicly available indices. That assumption is mistaken.

I have asked Mr. Barry if the redaction was in relation to the board discussing the risks associated with inflation. That is a "Yes" or "No" answer.

Mr. Fred Barry

The redaction was in relation to our discussions and considerations around how much the board might be paying in certain circumstances arising from inflation.

Will Mr. Barry say that again?

Mr. Fred Barry

It was in relation to how much the board might be paying in certain circumstances arising from inflation.

Okay. Mr. Barry made reference to the fact the PwC report had estimated inflation at that time at 4%. Why would that be so sensitive that it be redacted from the minutes?

Mr. Fred Barry

Deputy Munster is really asking me what has been redacted, and I am afraid we are not going to get anywhere with that.

I asked Mr. Barry, in particular, because the public need is not really served by him not disclosing the discussion. That is what this committee is about.

Mr. Fred Barry

The public need is well-served by us negotiating our best with those with whom we negotiate to minimise State expenditure. If that means we do not show our hand in any particular issue, that is in the public interest and not against it.

Prior to that, Mr. Barry had not done anything in relation to inflation. It was the PwC report that had given the rate of inflation at the time. When Mr. Barry was questioned at the health committee last week, that was very evident. The public need is not served by Mr. Barry redacting the information and the two reasons he gave have amounted to nothing. Anyway, people can see that for themselves.

As I often say here, that is your view. That is not necessarily the view of the committee. During the course of this meeting, people will express their own views. They are not the formal views of the committee until we make a report in due course. You are entitled to make-----

Okay. Thank you. If inflation rises above 4%, can the construction company claim that back?

Mr. Fred Barry

Correct.

If it was to rise to 7%-----

Mr. Fred Barry

Yes.

-----one could be looking at an additional cost of €166 million. Would that be right?

Mr. Fred Barry

I think if it was 7% across the life of the project, the additional cost would be in or about €50 million.

Okay. Is the clause in the contract around inflation increases standard for contracts of this type?

Mr. Fred Barry

I am not sure about the specific wording of the clause, but I would say that in the industry generally, contractors will willingly enough give fixed price without inflationary increase for up to three years. If one gets to four years, it is difficult. I know certainly in the private sector, in which I am very involved at the moment, nobody will give fixed price contracts for large amounts for such a long-term contract as this one.

Off-hand, would Mr. Barry know of any other public builds of this nature with clauses like that?

Mr. Fred Barry

I do. For example, a lot of the long-term road contracts had price inflationary clauses in them.

Mr. Fred Barry

That would be for longer-term costs. One will get fixed prices readily enough for two or three years. With inflation rising, getting out to four years is very difficult and certainly, one will not get bigger contractors to give fixed prices for anything going beyond that without an inflationary adjustment for a project lasting seven or eight years. I do not think one would get that in a public or private project.

On the contractor claims, is there any way of estimating the value of the claims between now and then? From what Mr. Barry said earlier I believe there is pretty much no way, but is there none whatsoever?

Mr. Fred Barry

No.

We have no idea, and this comes back again to the guaranteed maximum price. We have no idea whatsoever what the final cost will be.

Mr. Fred Barry

The guaranteed maximum price does cover the vast bulk of the construction and associated risks.

No. If we have no idea of estimating what the costs will be in those-----

Mr. Fred Barry

In every-----

Sorry, just let me explain. Those contractor claims are ongoing and will be for the foreseeable future, possibly for four or five years.

Mr. Fred Barry

They will, yes.

Mr. Barry has just answered me. We have no idea of what they would be. How could he then-----

Mr. Fred Barry

It is like pretty well every other project out there. Construction claims come in on every project the State is doing.

I know that, but it would stand to reason that we have no idea whatsoever of what the final cost will be. Is that a "Yes" or a "No"?

Mr. Fred Barry

It is not a "Yes" or a "No"-----

It is a silly answer to say "It is not a "Yes" or a "No"". It is a yes-no answer. Do we have any idea of what the final costs will be? That is a yes-no answer, in fairness.

Mr. Fred Barry

When the Deputy words it in that fashion, she is trying to get me to say that it is completely open ended what the costs might be.

No I am not. I am asking Mr. Barry a question. We have said that we have no way of estimating what the claims will be between now and the end of the build. Mr. Barry agreed that there was no way of estimating those claims.

Mr. Fred Barry

Exactly. A contractor-----

The question is, if we have no way of estimating what the claims will be then how can we possibly have any idea what the final costs will be? Is that a "Yes" or a "No" to my question?

Mr. Fred Barry

To say that we cannot have any possible sense of what the costs will be is not really a proper reflection. The contractor can put in endless claims. There is no restriction on the amount a contractor can actually come looking for. If one has a contract in place, as we have, which covers the vast majority of the costs out there, then it is not as though the guaranteed maximum price bears no relationship to the end costs or that billions of euro of extra costs can arise; they cannot. As I have said before, the contractor will make claims, we will resist them and it will be a surprise if some of those claims do not stick before the jobs is over.

I think it is fair to say-----

Mr. Fred Barry

This is the same as every single other large project going on around the city, be it public sector or private sector. On every one of these projects, the contractors are entitled to put in their claims and they get worked out. It is true to say that we cannot say exactly where it is going to end up but one cannot say-----

Mr. Barry cannot say what the final cost will be. It stands to reason.

Mr. Fred Barry

We cannot say exactly where it is going to end up-----

So Mr. Barry has no idea what the final cost will be. If the witness has, then he should say it. This is why I ask the question. Unless he tells us otherwise we can presume that he has no idea what the final cost will be.

Mr. Fred Barry

Deputy, we are going around in circles on this.

No. Does Mr. Barry have any idea what the final cost will be?

Mr. Fred Barry

Indeed. The final cost will be the guaranteed maximum price, plus whatever residual risks-----

Whatever you are having on top. With that response, it is fair to say that the €1.7 billion is aspirational rather than a reality.

At the committee last week, Mr. Barry said that some contractors tend to approach claims differently. Some make claims that can be managed and substantiated, hence 50% of claims are done while another 50% are not done. Mr. Barry said that other contractors would make more inflated claims. This is what Mr. Barry said at the Oireachtas Joint Committee on Health. What record has the contractor BAM in this regard? Given the use of this particular procurement model for the first time ever in a public build, I assume that the board would have examined this at an early stage.

Mr. Fred Barry

I am not quite sure what examination was done on the pre-qualification of the tenderers because I was not the chairman at the time.

Is there anyone here from board who was there at the time?

Mr. Fred Barry

I do not think so.

Nobody? They are all gone.

Mr. Fred Barry

Those who were involved in that aspect are not. Some people here were on the executive team at the time.

Perhaps they may be able to answer. It is no secret that BAM has a history of overspend in other countries and not just in this country. Given the type of procurement and it being the first time it was used, I assumed this would have been looked into and researched in the context of cost control and overruns.

Mr. Fred Barry

I was not there at the time but I will observe for the committee, because it is of broader interest than just for this project, there is a real-----

For the members of the committee who were there at that time there was the infamous Ballyfermot leisure centre and the Port of Cork project. It would have been pretty obvious. I wonder what oversight was given to that?

Mr. Fred Barry

There are real difficulties in the State sector in referencing previous performance when awarding new contracts. This is not just a children's hospital matter, it is a more general matter. I am aware that some of the relevant Departments are working on this issue currently and may come up with an approach that will allow the purchasing agencies to reflect and include consideration of past performance a little better than can be done at the moment. Right now, under the rules that are there, essentially if contractors meet the pre-qualification criteria, one cannot stop them tendering. If they tender and their tender is the most economically advantageous, then they have to be awarded the contract. There is a challenge there, certainly.

Given what he has said, and that this procurement model had never been used before, would Mr. Barry have imagined that this sort of history - which was out there in the public domain - would have been taken into account given the scale of the project, the costs involved and what we have seen to date?

Mr. Fred Barry

In more recent procurements using that type of approach it has become usual at the pre-qualification phase to examine the different contractors and their key personnel for their ability to work within the co-operative shared risk-type environment and-----

Would there ever have been a prevention from doing that?

Mr. Fred Barry

I do not know. I do not know if that would ever have been prevented. I just know that is being done more widely now in Ireland and in other countries.

It was not done anyway. Maybe it was a bit slack.

Mr. Fred Barry

I do not know whether it was or was not done in this case.

That is why we are where we are, I suppose.

Mr. Phelim Devine

I was involved in the executive when we pre-qualified the contractors. This was done in 2015 and they were pre-qualified around the end of 2015. We tendered the project in 2016. On the criteria against which they were assessed, past performance was not one of the criteria. Obviously, financial capability, record and experience were some of the criteria. My understanding of public procurement, which complied with EU rules at that stage in 2015, is that one cannot preclude a contractor from tendering for a project based on their past performance in the context of relationship or claims history, as Mr. Barry has already outlined

Would you get references from previous employers who engaged the contractor?

Mr. Phelim Devine

I do not believe so. As I recall, it was based on their financial capability, on their experience of building similar large-scale acute hospital projects and on their people.

If it was not the formal case then, when did the new process commence of looking at a contractor's past history?

Mr. Phelim Devine

I am not sure. I know it did not exist back in 2015.

Mr. Fred Barry

If I may clarify, the process of looking at a contractor's past history has not commenced. In some cases there is a degree of psychological testing of the key individuals to judge how they would perform in a co-operative environment.

Would Mr. Barry consider it good practice to do this before engaging somebody? Should one speak to somebody who had engaged the contractors before?

Mr. Fred Barry

The psychological testing?

No, past experience of a contractor.

Mr. Fred Barry

In the private sector past experience is looked at all the time.

Grand, but does Mr. Barry think it would be good practice in the public sector?

Mr. Fred Barry

Certainly, in my time in the public sector I would very much like to have been able to look at past performance.

Is it the practice now?

Mr. Jim Breslin

I refer to what the Chairman said about the Department of Public Expenditure and Reform and looking at the capital procurement framework to see the extent to which this could be done. There are definitely restrictions on this. I am not here to advocate for contractors, but if somebody under a previous contract put in a claim and validly got the claim through the dispute resolution process, up to and including the High Court, and then it was subsequently said, "Because you took that other person to court-----

I did not suggest that.

Mr. Jim Breslin

I am just saying it would have to be crafted very carefully and one would need to make sure it would stand up to challenge.

When the Department of Education and Skills tenders for schools, whether today, last year or the year before, it seeks references from organisations that have previously worked on building schools. Different parishes or locations around the country or different ETBs could be involved. Deputy Catherine Murphy will be aware of one project in my constituency and in her county in respect of which references were granted and a person who was not short-listed was not given an opportunity to comment on the adverse reference they were given. They took the case to court and, because they were not given an opportunity to comment on what they felt was not a good recommendation from a previous employer, the tendering had to start again. What this demonstrates to me is that, as far as the public sector is concerned, the Department of Education and Skills has a budget, builds €600 million or €700 million worth of schools and has a practice of getting references from previous employers that engaged those contracts. I am now surprised to hear that while that happens on school projects, the Department of Health does not seem to know anything about it when it comes to the children's hospital or does not even know whether that practice exists in the public sector. It is happening, though.

Mr. Fred Barry

Indeed. The Chairman did mention that that case ended up in the High Court and the State lost.

Yes, that is correct.

Mr. Fred Barry

So, I am not sure that that is-----

There was a good practice in place but it was not followed through on or completed fully.

Mr. Fred Barry

Indeed.

I am just saying that this idea of getting references from people who employed the contractor previously is normal. Perhaps that Department was caught out in that it did not follow the process through, but this had been a standard feature to allow people through the pre-qualification process. We did not seem to get an accurate understanding of that practice. Does the Comptroller and Auditor General wish to comment? I know the case I am talking about.

Mr. Seamus McCarthy

I do not know the case and have not come across it but the expectation, as I understand it, with public procurement is that each of the parties entering into a contract is responsible for its own activities, oversight, management and so on. If there are weaknesses on the State side, it is not the fault of the contractor that puts in for tender. If it wins in conciliation or in a court case, it is legally entitled to that and cannot be prevented from future work. It has done everything, as it sees it, legally and properly. The onus then is on public bodies contracting to make sure that their systems are tight and close, that decisions are made in a timely way and that processes are followed. That is the side we really need to focus on.

It is not the contractor; it is-----

Mr. Seamus McCarthy

The commissioners.

-----the pre-qualification process from the State side.

Mr. Jim Breslin

Mr. Curran, who has responsibility for the overall health capital programme, might be able to make a more general comment.

Mr. Jim Curran

Regarding the short-listing of contractors, they submit a pre-qualification questionnaire, part of which relates to reference projects in respect of which they supply certificates of satisfactory completion from whoever they were contracted to. The contractors supply certificates of satisfactory service for those reference projects.

Those reference projects can be verified.

Mr. Jim Curran

Yes

We can go back and check them. That is what I have been talking about. Did that happen here, though?

Mr. Fred Barry

It did, but that still does not give the committee access to the claim history on those projects.

No, but this is broader than just claim history; it is a matter of quality of work and timeliness.

Mr. Fred Barry

Indeed. Also, and I say this from my experience in bidding for contracts, if one were bidding for a job, naturally enough, the projects one would put forward as references would be those in respect of which one is pretty well-off. One might not bother including those that ran into some difficulties.

Mr. Devine was involved at that stage. Irrespective of what has been said in the past few minutes, was he aware of BAM's record in respect of overruns?

Mr. Phelim Devine

I was aware of some projects BAM had executed that overran.

Was the rest of the board aware of that? Did Mr. Devine inform the board?

Mr. Phelim Devine

I am not sure if the rest of the board were aware. They may have been. I need to go back and clarify that as part of the pre-qualfication process Mr. Curran talked about, that cannot be taken into account. We have just had that discussion. The other bit of information I would like to add is that the process we undertook through pre-qualification and the tender process was fully compliant with both public rules and European rules on procurement. We independently audited that to that effect as well.

Is this not amazing, though? I refer to what was said about past performance in the private sector. Whoever said it laughed straight away. Of course past performance comes into it, but not in the public sector.

My next question is about delays. Last week in the health committee Mr. Barry gave the impression that there were fairly minor delays with the build, but when he was pressed later on he mentioned there was a deadline to remove and replace a road that was causing a delay. Can he give us a bit of information about that and any other delays?

Mr. Fred Barry

Certainly. When I was first before this committee and indeed the health committee, around May or so of last year, the main contractor was behind schedule by weeks. I said at the time that it was well within the contractor's compass to make up that time. I said last week and I will say again to this committee that it is unfortunately the case that the contractor has not made up that time - not only that, but it has slipped further weeks. As an example of where this would show up on a milestone in work to date, the removal of the old road that crossed the centre of the site was a milestone in the ongoing activity. Its removal took place a couple of months later than it would have taken place had it been done per the contracted programme. The work going on at the moment is primarily the pouring of concrete: the concrete frame, the columns, the slabs and so on. There is other work going on around the site as well.

When Mr. Barry refers to the delays and the setback in time, what kind of delay is he talking about?

Mr. Fred Barry

Is it probably six weeks or a couple of months behind programme at this stage.

If there were further delays, that would set it back further and further. I was curious because what Mr. Barry said at the health committee about minor delays did not tally with what Mr. Reid, I think, from the HSE said. There were media reports going back to last September that an internal memo in the HSE had stated that capital project for the new children's hospital is facing delays to the construction programme which could impact critical timelines if mitigation measures are not taken. I presume the NPHDB has taken those stringent mitigation measures. I ask Mr. Barry to outline to the committee what they are.

Mr. Fred Barry

Sorry, I am missing something. What did Mr. Reid say?

Mr. Reid said that "capital project for the new children's hospital is facing delays to the construction programme which could impact critical timelines if mitigation measures are not taken".

I would presume that the board would have seen to it that stringent mitigating measures were taken to ensure that there are no further delays and timelines are not set back. Please outline what steps or measures have been taken.

Mr. Fred Barry

Sure. What we are doing about that is we are working very closely with the contractor on the details of the programme. Just to step back a little bit, at the time of contract the contractor puts forward a programme scheduling the works as to how he is going to get from the start of the construction to the end within the timeline set out in the contract. As the work unfolds there are normally changes to that programme. Some things get ahead and some things get behind but in everything things are rarely done exactly in accordance with that programme. The contractor comes up with new programmes and rescheduling of the work. The contractor is developing new programmes at the moment and we are working very closely with him to ensure that those programmes are consistent with the contract.

Has nothing been pinned down? Can Mr. Barry show us a document today that lists the mitigating measures that have been put in place?

Mr. Fred Barry

Not in the sense that the Deputy has asked.

Fair enough. I want to ask about the experience of the board. There was a lack of experience on the first board. How many hospitals has Mr. Barry built?

Mr. Fred Barry

How many hospitals have I built? I have built no hospitals on a greenfield basis. I have worked on hospitals but I have never built any stand-alone hospitals.

No, I am not talking about working or being part of working. Mr. Gunning has said that he has never done either. He has not been involved in the construction of a-----

Mr. Fred Barry

Sorry, just to answer that a little further. Given my position as Chair of the board, I have been on boards of companies that have been building hospitals. Lots of them.

Who, on the board, is experienced in leading a hospital project of this scale?

Mr. Fred Barry

There would be a number.

Mr. Fred Barry

Indeed, we have one board-----

We were furnished with a list that contained everybody's details and I did not see any board member who had managed or led a project of this scale before.

Mr. Fred Barry

Sure. Well, I have certainly managed lots of projects of this scale before.

No. I asked who has led a project.

Mr. Fred Barry

I have led. I have been project manager, project director on projects of this scale-----

I am talking about a hospital-----

Mr. Fred Barry

-----and for-----

-----because we are talking about something specialised.

Mr. Fred Barry

Not hospitals.

So Mr. Barry has not. I ask because of what is stated at the bottom of page 70 of the PwC report regarding controllable risks and please note that the contractors are BAM. It reads: "Contract management. The Contractors understand the contractual relationships better than the NPHDB, allowing them to exploit opportunities to increase prices." Is that not more or less saying they can make buck eejits out of the entire board? Have they made fools of the board? I have cited what the report refers to as one of the controllable risks.

Mr. Fred Barry

Am I allowed to respond?

Mr. Fred Barry

Thank you. I just point to our record during the course of this year where we have dealt with a very large number of contractor claims and we have come out of this fairly well.

Right. I have quoted what is written in black and white in the PwC report.

Mr. Fred Barry

Black and white is the actual result on the ground.

The report highlights my point about the lack of experience allowing contractors, and the contractor in this case, to play the board for fools as there is no expertise. Let us take, for example, specialised lighting in a hospital setting. The PwC report states that the board will be exploited because of a lack of specialised experience.

Mr. Fred Barry

I am gobsmacked.

Mr. Barry can be gobsmacked but we are talking about public funding and public moneys. It is not the first time that the board was appointed lacking in experience. It is the second time that nobody has specialised experience and nobody has led a project of this nature before. It is a case of déjà vu and we have a board with no experience, a fact that is clearly stated in black and white in the report.

A final response from Mr. Barry and then we will hear from Deputy Cullinane.

Mr. Fred Barry

I would say that I am fairly experienced in the management of very large complex projects, including projects very similar in nature to the ones we are dealing with in the hospital. I accept that there may be others much better than me at the job but I was asked to do it. I am not really here to interview for the job.

No but the PwC report highlights the lack of experience on the board and the fact that its members could be exploited, and not for the first time as this is the second board. Hence, the overrun and why we are here in the first instance.

I call Deputy Cullinane.

Go raibh maith agat. Before I put questions to our witnesses I want to make the following clear. I do not like witnesses taking a casual approach to the Committee of Public Accounts and getting irritated when questions are put. I very much hope that there will be a step change as the meeting progresses because we can stay here and ask a second, third and fourth round of questions, if needs be.

I am also disappointed that we have not got additional information on what we received last year, which is a point that the Chairman made at the start of the meeting. We are here to hold the witnesses to account in terms of governance, accountability and spend, and the control mechanisms that are in place. I will concentrate on all of that. I will go under the bonnet to see what is actually happening and, hopefully, get responses to my questions. If I do not get responses then we will stay for a second and third round of questions because this is a very important issue. We are here to do a job and we must do it.

I shall start with the guaranteed maximum price. Mr. Barry said, in response to Deputy Munster, that the price of €1.433 billion is guaranteed in the context of the agreed framework and contract and there are residual risks that are outside of that. The €1.433 billion that is guaranteed is only what is guaranteed in terms of what is within the framework of the contract. Is that correct?

Mr. Fred Barry

Correct.

In a sense then it is a qualified guarantee. What the public expect and hear when one says there is a "guaranteed maximum price" is that not a cent more above the €1.433 billion will be spent because we have a guaranteed maximum price. When most lay people hear the words "guaranteed" and "maximum" they will think that is the price and the amount will not go beyond that but that is not the case. Can we at least accept as a start that the guaranteed maximum price is a qualified maximum price and that it is possible if not likely that the price will be higher than €1.433 billion?

Mr. Fred Barry

Absolutely.

Residual risks have been mentioned. What are the residual risks and in what areas will there be possible risk? Residual risks were talked about. Are they the areas for additional claims? Additional cost claims that can be made by the developer were mentioned. A developer may make a claim but it does not necessarily mean they will be paid so one has to go into a negotiation, there will be a barter and they may or may not be paid. I assume that is what Mr. Barry was talking about. There are residual risks and because of them there may well be additional cost claims. If that is the case, if Mr. Barry agrees with that, can he outline the areas in which there is the possibility of a risk in terms of additional costs?

Mr. Fred Barry

Certainly, I will do that. I would just add to it because the contractor's claims are not restricted to what we would call residual risks. The contractor can legitimately claim that we, on our side, have been late in providing access to something or late in providing information, or have mis-described something, and that might lead to an additional-----

That makes the guaranteed maximum price even less guaranteed.

Mr. Fred Barry

My point is that the claims can be for matters that are, in our view, perhaps contained within the guaranteed-----

Okay. There are two distinctions.

Mr. Fred Barry

That is right.

There are possible mistakes that the board may have made and I am not saying it did.

Mr. Fred Barry

Correct.

There could be errors.

Mr. Fred Barry

Exactly.

And then there are the residual risks.

Mr. Fred Barry

And then there are residual risks. Yes, indeed.

I get the first part. I would like a breakdown of the possible residual risks.

Mr. Fred Barry

Among the residual risks are client changes, changes to the design. They might arise, perhaps, with the medical practitioners. Practices have changed over the years while the project was being built and some change was asked to be made to the building. That would be, and I think appropriately, not something that the contractor would have included for in the original price.

If we, on our side of the State, were to introduce changes to the design-----

Design changes are one potential.

Mr. Fred Barry

That is one potential.

What is the next one?

Mr. Fred Barry

We have talked about inflation. If inflation is over 4%, that cost will fall.

Is that one of the residual risks?

Mr. Fred Barry

That is a residual risk.

I will get to that in a moment and I have questions on it. What else is there?

Mr. Fred Barry

If there any regulatory changes that lead to an increase in costs, that is, changes in legislation or regulations from any of the many bodies that have regulatory control over the operating of hospitals, which could manifest themselves as design changes-----

When Mr. Barry referred to design changes, changes in regulations and so on, are they ones for which a claim could be made, although that does not necessarily mean that the claim will be paid? If, for example, the developer submitted a claim as a consequence of one of the residual risks relating to design changes or the regulations he outlined, I imagine there would be negotiation. Is that how it would work?

Mr. Fred Barry

Indeed. If there were a change for one of those reasons, the contractor would be entitled to be paid.

There is no guarantee the contractor would be paid. There would have to be a negotiation between the board and the company.

Mr. Fred Barry

There would have to be, but the contractor would be entitled to be paid for those changes and would be paid for them.

There were already some cost controls. Mr. Barry stated the board manages the claims that are received. A range of claims could be received and there may well be pushback from the board on some of them to protect the taxpayer, as he noted.

Mr. Fred Barry

Yes.

That can happen in certain circumstances where it is not guaranteed that simply because a developer makes a claim, he or she will be paid.

Mr. Fred Barry

Correct.

Inflation is not one such circumstance.

Mr. Fred Barry

No.

The contract is clear.

Mr. Fred Barry

To clarify, the entitlement to payment through inflation is not one of the circumstances the Deputy outlined. There will be issues around when particular costs fall and there may be some arguments over the calculation of the amount to be paid-----

My point is that-----

Mr. Fred Barry

It goes back to Deputy Munster's question.

-----it is more clear-cut.

Mr. Fred Barry

Yes.

Mr. Barry might confirm my understanding or, if I am wrong, correct me. My understanding is that inflation of 4% is built into the contract. Is that correct?

Mr. Fred Barry

Yes.

If inflation is less than 4%, will there be clawback for the State?

Mr. Fred Barry

I regret to say that is an academic point because I think inflation is running at about 7% this year.

That was not the question I asked, because I know that. If it was less than 4%, would we get money back?

Mr. Fred Barry

I do not think so.

We get no money back if it is less than 4%, but if it is above 4%, we will have to pay the difference.

Mr. Fred Barry

Correct.

The risk, in terms of inflation, will be carried by the State. Why is that? I ask Mr. Barry because he is leading the project-----

Mr. Fred Barry

I am leading the project but did not have anything to do with the negotiations of the contract. I am implementing the contract as agreed. I did not have a role in the negotiations.

We have to examine where mistakes may have been made. Could that have been one such mistake, where better controls should have been put in place?

Mr. Fred Barry

To go back to my earlier point, it is most unlikely that one would get any substantial contractor to agree to carry inflation risk on a contract of six or seven years. Contractors will not accept the risk, and that is a matter beyond the children's hospital, or us, or -----

Why include the rate of 4% in that case? If it was included, one would expect that some attempt must have been made to mitigate the risk. In fact, there was none, given that if it is less than 4%, we will get nothing back, while it is more than 4%, the State will have to pay more.

Mr. Fred Barry

Yes.

My point is that irrespective of that, we can all accept that at the end of the year, inflation will be above 4% and there will be an additional cost. Is that fair to say?

Mr. Fred Barry

Yes, that is true.

That additional cost will be on top of the €1.433 billion. At least in this area, therefore, there will be an additional cost for the taxpayer.

Mr. Fred Barry

Yes, there will.

It goes back to the set of minutes that Deputy Munster mentioned earlier. It was redacted where the board discussed the risks associated with inflation. Mr. Barry stated the discussion was probably about what the board would have to pay in "certain circumstances" - those were the words he used - if inflation were to go above 4%.

Mr. Fred Barry

Yes.

There was a discussion at the board. If the cost will have to be paid, it is not commercially sensitive.

Mr. Fred Barry

The fact of having to pay is not commercially sensitive-----

In that case, why not give us the information? We should have the information. I do not see any issue with it. If there is to be an additional cost, my estimate is it will be approximately €40 million. I am not an expert but it is my estimate in light of what inflation will be.

I will ask a question rather than giving my view, which Mr. Barry might consider unfair. Is it the case that the minutes were redacted and he does want to give us the information because he does not want a headline to result from a meeting of the committee to the effect that the cost will higher than €1.433 billion? It goes back to the issue the Chairman raised earlier, namely, that we are not getting any additional information because there is a preciousness over the cost. For understandable reasons, the costs have escalated and the board discussed the matter. We have a responsibility to probe the information. We have a version of the minutes that has been redacted in respect of what is clearly either another cost overrun or an additional cost, yet Mr. Barry is not in a position to tell us the figure. I do not know why and I can only surmise. Is it because he does not want, at this point, the public and the committee to know there could be an additional cost of at least €40 million for construction inflation?

Mr. Fred Barry

There were a number of questions. First, it is already in the public domain, and we referenced the figures in the PwC report, that if inflation is over 4%, there will be extra costs over the €1.433 billion. I reiterate that inflation this year is running at about 7%. It is an absolute certainty that we will pay extra money on foot of that inflation. If inflation runs at 7% for the life of the project, the total additional cost from inflation will be in the order of €50 million. If it is higher, it will be more, while if it is less, it will be less. There is no suggestion on our part that there is not going to be an additional cost from inflation over the €1.433 billion. If I have given the impression that we think there will not be a cost through inflation, I did not mean to give that impression.

Is that €50 million over the entire period of seven years?

Mr. Fred Barry

Yes, it is.

When something like that is redacted-----

Mr. Fred Barry

That was not what we were-----

-----we are left to guess because we are not in the know. When we do not know, it naturally raises people's curiosity.

Mr. Fred Barry

Yes.

When a section of the minutes stating there was a discussion on the risks associated with inflation is redacted, it will obviously pique our interest-----

Mr. Fred Barry

Indeed.

-----and still I have not heard a satisfactory response as to why the section was redacted. Mr. Barry stated an officer made the decision. Who makes such a decision?

Mr. Fred Barry

The information officer.

Does that information officer work for the board?

Mr. Fred Barry

Yes.

Mr. Barry cannot tell us why the information officer made the decision but only who made it. Will he provide a reason?

Mr. Fred Barry

I can give a little colour without infringing on anything. Part of our considerations at the moment are around how much we will pay for this year. We have a pretty good idea in that regard but there will be some negotiations around it. For the committee's interest, assuming inflation stays at 7% this year, depending on how much is paid in invoices at the end of the year and the exact figure, the additional cost for 2019 will be in the order of €2 million or €2.2 million. We will not have the exact figures until we get the indices, which will come out-----

That is helpful. Perhaps if that information had been given at the start, I would have avoided having to spend five minutes trying to get it. Will Mr. Barry expand on his point that there will be a level of negotiation? I do not want to be unfair to the board. My understanding was that once inflation exceeded 4%, the additional cost would have to be paid, whatever it was. If there is to be a bartering on the matter-----

Mr. Fred Barry

It is not quite so much bartering but there may be an issue as to when certain costs land and, consequently-----

Mr. Fred Barry

Timing.

Is Mr. Barry saying the 7% is year by year based on the cost landing on the invoice when paid?

Mr. Fred Barry

Yes.

The 4% is not for the life of the project.

Mr. Fred Barry

It is a rate of 4% per annum.

Per annum. If for two years of the project, inflation runs at 7%, we pay the balance. If in three years, inflation is 2%, we will save nothing.

Mr. Fred Barry

We would save that. It is cumulative.

Mr. Barry needs to explain this.

Mr. Fred Barry

Certainly. If inflation runs at 7% this year and 7% next year-----

So we are caught for 3% on what-----

Mr. Fred Barry

Three percent this year, and we are caught for 6% next year if there has been inflation of 14% and only 8% covered in the contract.

If the inflation runs cumulatively at 7%, at 30% over and the contract only covers-----

Mr. Fred Barry

Four percent.

We could end up paying 17% or 18% in the last year.

Mr. Fred Barry

Exactly.

It is estimated that construction inflation is softening a little. It may well be 6% to 7% this year but it may well be less next year and the year after.

Mr. Fred Barry

It may well be less, in which case we benefit.

Is the board doing that type of analysis now? Where does Mr. Barry get his information from? I would imagine that if he were trying to control costs, he would be looking at the bodies that do the work in regard to construction inflation and looking ahead to what the costs will be. He said it is cumulative.

Mr. Fred Barry

It is.

He has a good sense of it.

Mr. Fred Barry

If we had to bet money on it, we would take it as about 7% running through but a lot depends on how much the State is going to spend in the period. There will be changes in the economy, and Government spending is going to change. Private sector spending is going to change. That can move up or down. This goes back to debates I have had with various representatives. When we look forward and ask what the level of inflation is going to be in the sector in a couple of years, we look at what the CSO and all the forecasters state but there is no absolute consensus.

At least, however, there is acceptance that there will be an additional cost. Mr. Barry also said this at a meeting of the Joint Committee on Health. It is almost certain there will be additional costs associated with inflation. With regard to the other residual risks or other claims that may be made by the developer, is it his view that there will be additional costs associated with other elements or elements other than inflation? He mentioned earlier that it is almost certain that-----

Mr. Fred Barry

It is. Regarding the issue of design change, it is very usual in long-running projects for the end-users' requirements to change a little as the project goes along. I certainly see that in the private sector all the time. Consequently, based on my experience, I expect that some changes will be introduced into the project at the back end.

Does the board, or Mr. Barry as its chairman, have meetings with the Minister?

Mr. Fred Barry

I have meetings with the Minister.

Are those meetings minuted?

Mr. Fred Barry

This came up at last week's meeting.

I was not at last week's meeting but I am here now and I am asking the question.

Mr. Fred Barry

Indeed. I do not take minutes of those meetings. The records that are kept of those meetings are kept by the civil servants supporting the Minister. Whether he has minutes produced or whether file notes are kept is a matter-----

Are there records of the meetings? Surely from a good governance perspective, there will be somebody present to take minutes of the meetings. At the meetings, does Mr. Barry discuss the potential of increased costs in terms of some of the residual risks or reasons there may be additional costs? Does this come up in any of the discussions with the Minister?

Mr. Fred Barry

What comes up with the Minister generally are issues around progress on the project, where we stand on the cost-----

I did not ask that. I am sure all those issues arise but I am asking whether Mr. Barry has ever had a discussion with the Minister at any of the meetings about the possibility of additional costs and the fact that there are risks. Has he said to the Minister that, while he is on target, there may well be additional costs?

Mr. Fred Barry

Yes, indeed.

And that is not minuted on Mr. Barry's part?

Mr. Jim Breslin

I can talk about attendance at those meetings. The question arose last week about the recent meeting in November. There is a record of that meeting. It is on the file. We record the meeting. There was toing and froing as to whether the record was a minute. A minute is usually signed off at a subsequent meeting and everybody agrees on it. We do not do that at all the meetings where Ministers meet people. We take our own record. We place it on the file and that suffices for-----

I accept that. That is a credible answer. I have no difficulty with the answer but the difficulty concerns where there are additional costs. We should remember the history of this project. There were additional costs, and questions were asked about when Ministers knew or did not. There was no suggestion that the Ministers had done anything wrong. Let me outline what creates suspicion and difficulties. Let us just say there are additional costs, that they have been discussed at meetings with the Minister and that a future Committee of Public Accounts is looking for notes of minutes and is told there were none, or that there was a note that was not a minute-----

Mr. Jim Breslin

I am confirming a record.

I know Mr. Breslin has confirmed that but I suggest that if there are meetings taking place between the chairman of the board and the Minister and discussions on additional costs, bearing in mind the importance of this issue and the significant cost overrun, there should be proper record-keeping to allow us and members of a future Committee of Public Accounts to do our job. It would be better for the Minister. How many times has the HSE found itself in a position where there were difficulties over record-keeping and minutes, and what was in them and what was not? If clear minutes are taken, there is no issue.

Mr. Jim Breslin

I am in agreement. The Deputy will have seen over the course of this project that there has been no lack of record-keeping. We published all of that. It went to PwC. It showed the timeline of all the escalations and the information. There is a record of the most recent meeting too.

I have one final question and I will move on then. It relates to what Deputy Munster said earlier. The BAM report is in some respects quite damning regarding the board. I do not refer to Mr. Barry; I refer to the previous incarnation of the board. I acknowledge he said there have been a number of changes. It is stated that the contractors - in this case, BAM - understand the contractual relationships better than the development board, allowing them to exploit opportunities to increase prices. It is quite incredible that this is what PwC arrived at. I would like Mr. Barry's or Mr. Breslin's understanding of it. My layman's reading of it is that there may have been a lack of expertise in regard to how the contract works and cost controls. If there are many potential additional claims, people are needed who have the experience and knowledge to address them. PwC's view is that the contractors understand the contractual relationships better than the development board.

Mr. Fred Barry

I think PwC identified this as a risk rather than a fact of the case. I think it was put by them-----

Notwithstanding that, it is still damning.

Mr. Jim Breslin

The context within which PwC framed some of this was that it considered that some of the expertise was in the design team rather than in the development board itself, and some of the integration within the design team and between the design team and the executive in the development board needed to be strengthened. I know that the development board has substantially enhanced its claims-management process and has brought expertise into the board to support it in that regard. It has stronger control systems in place post-PwC than would have been in place at the time.

The witnesses are welcome. I have one or two questions arising from the opening statement. One of the things we do is try to decode language or spot things that may imply something that one expects to mean something different. I have two questions in that regard. The first is on the Blanchardstown facility. It was handed over to CHI. Since we last met, services have commenced there. When will they be fully operational? Knowing that will give us some sort of an idea as to how the children's hospital will work when fully operational.

Ms Eilísh Hardiman

I will take that. I thank the Deputy. This is the first time representatives of CHI have been before the committee.

Children's Health Ireland is a State body established under the Children's Health Act 2018 and a section 38 organisation under the health Act, which means it is commissioned to provide services under the HSE via an annual service arrangement. Children's Health Ireland commenced operation in January 2019. Our main role is to provide services to approximately 336,000 children who turn up to our paediatric services at Crumlin Hospital, Temple Street hospital, Tallaght Hospital and the new facility at Connolly Hospital Blanchardstown which opened in July. These four services operate as one organisation, led by one board and one management team. We provide services through 4,000 staff, working through 39 different clinical specialties, to the sickest children of 25% of the population and all of the children in the greater Dublin area.

As I have limited time, I would like a response to my question.

Ms Eilísh Hardiman

The facility at Connolly Hospital was handed over on 31 July. There are two major elements to it, namely, outpatients and urgent care. Outpatients is fully operational, Monday to Friday, 9.a.m. to 6 p.m, providing general paediatric services. It is building up its services incrementally and it is working very well. In regard to urgent care, we have had challenges in recruiting emergency medicine consultants. When the facility opened, we had seven new emergency medicine consultants, which is a great increase, but due to unplanned leave and an inability to find locums, we could not expand the opening hours beyond Monday to Friday, 10 a.m. to 5 p.m. The facility closes at 8 p.m. but it takes approximately three hours to clear the department of patients.

When will the facility be fully operational?

Ms Eilísh Hardiman

It is dependent on our recruitment strategy. We have a pipeline of consultants coming in over 2020. When they come on board, we will be able to expand the service. Between now and then, what we are trying to do is increase the hours-----

When it is expected to be fully operational?

Ms Eilísh Hardiman

It is dependent on getting these consultants in 2020.

So, Ms Hardiman cannot be sure it will be fully operational in 2020.

Ms Eilísh Hardiman

We have a good idea of a pipeline of consultants that we need to address to this area. Paediatric radiologists are one of the areas where there is a challenge. We have identified consultants, who we appoint proleptically, which means they get a position but they may be finishing off their training before they start.

I am trying to get an idea of the challenges of operating this small facility.

Ms Eilísh Hardiman

This is about a model of care. Children's Health Ireland is trying to change how we deliver services. The model of care is very much around-----

I am sorry but I must move on. Many of the issues in regard to this facility are matters for the Joint Committee on Health. I am trying to deal with matters relevant to this committee. We are building a hospital that is to be completed on a particular date from the point of view of BAM and other contractors walking off the site and the hospital being handed over. The operation of this facility gives us some idea of the likely challenges of getting that hospital fully operational. I will move on.

The second issue arising from the opening statement is the updates on all aspects of project delivery. Controlling costs is critically important. A lengthy list of technicians is involved in the project, including quantity surveyors, architectural technicians, valuation officers and portfolio planners. I would like Mr. Gunning to elaborate on the role of each of these professionals and if that role changes over time. We are all interested in containing cost overruns or even reducing some costs. What are the prospects of that happening?

Mr. David Gunning

I will ask my colleague, Mr. Phelim Devine, to follow up in case I miss any particular points. The Chairman made an interesting point about the National Paediatric Hospital Development Board when he said, "They go way when the development is over." The organisation has been set up for a specific purpose and it is staffed by a wide range of contractors and consultants on a particular basis, including a design team of over 200 from whom we purchase services. We have people closer to the organisation who are part of the national paediatric hospital organisation. These are known as constructive management services and they provide an array of different services on site. We also buy in specialist services from others. Deputy Murphy is correct that there is a lengthy list of urban planners, healthcare planners, architects, building engineers, civil and structural engineers and so on.

In the design team we have, predominantly, a large number of architects. BDP is the lead architectural firm. It also provides what is know as the employers' representative function. We have quantity surveyors from Linesight, who measure costs and do various other activities. The ARUP company provides mechanical and electrical, primarily design verification, services and supervises implementation of that on site. We then have an organisation called OCSE Civil and Structural Work looking at all the structural design, the concrete, the steel and the pulling together of the whole thing. They are the range of services within the project.

Mr. Gunning might provide a follow-up note to the committee on how that has changed over time.

Mr. David Gunning

I would be happy to do so.

The architectural side will probably reduce and other specialties will probably increase so Mr. Gunning might provide a note outlining how that has changed.

Mr. David Gunning

I would be happy to do that.

How does this project compare with a private sector build or other public sector build in terms of the level of administration? Is there any variation in that regard, or is it pretty similar?

Mr. David Gunning

I came to this project around two months ago. It is well staffed but it is pretty lean. We do not have any surplus staff. In terms of administration, there is administration in all of the key areas but it is around contract administration and claims administration. As we are engaged in processes that are legal or quasi-legal in terms of conciliation and arbitration, it is really important that there is excellent record keeping and we are in a position to find information. We have strengthened the team and our software support and so on to enable that.

I do not mean to diminish the role of administration because it is critically important, but I wanted to know how it compared. Following a lengthy discussion on this issue last year, the committee published a particular page in its periodic report which contained a table of the various components.

Mr. David Gunning

To which page is the Deputy referring?

It is page 88 of the committee's periodic report. Leaving aside building inflation and other issues arising from design changes, the project is on course to complete at a cost of €1.43 billion. In terms of this table, are there variations from what was presented last year? If the witnesses do not have that information to hand, they might provide the committee with an updated table of the profile of changes at a later date.

Mr. Fred Barry

Yes, we can provide the Deputy with an updated table. I could not give the individual accounts off the cuff but we will do that.

It would be useful if we had a similar initiative on a constant basis. We could then see where changes are taking place. In respect of our periodic report, there were 11 recommendations from the PwC report. Have they all been implemented at this stage?

Mr. Fred Barry

We and the board have implemented them as they refer to ourselves and the board. Some of the recommendations are broader and perhaps the Secretary General might want to speak to those. The development board has implemented all the recommendations made that are addressed to us.

Mr. Jim Breslin

I mentioned at the outset that the development board and ourselves have led on the implementation of a range of the recommendations, including the splitting of the role between the chief officer and project director, as the Deputy sees today. Approvals were given for those and recruitment done. The two recommendations that relate to major capital projects in general, not specifically the national children's hospital, are relevant to the Department of Public Expenditure and Reform, which is on the record as saying it is taking them into account in how it is going to revise the public spending code. I think the Chairman referenced the fact that they have updated the committee on that and expect to conclude it shortly. As an addendum to that, I also identified earlier that as soon as we have that, at the same time as the public spending code concludes, we would intend to revise our overarching governance structures to make sure we are fully in line with the public spending code. That will streamline the bit above the development board in Children's Health Ireland, which people have commented on. I think they are fair comments.

If changes have taken place in structures, other than the outline we had, it would be useful to see a map of those.

Mr. Jim Breslin

As soon as we make that decision, and we will have to go back to Government with it because Government approved the original structures, we will write to the committee and advise it.

I want to go back to Children's Health Ireland. It engaged external expertise and technical support, according to today's briefing paper, and €35.1 million has been invested across the workstreams. There is long-term investment there. That was between 2016 and 2019. Given that Children's Health Ireland has not employed many of the people who will run the services in Blanchardstown, is this work concluded? Is it delayed by virtue of the fact that Children's Health Ireland does not have the staffing fully in place?

Ms Eilísh Hardiman

Again to give the context for that, I outlined what we do on a day-to-day basis, which is delivering services across four sites in Dublin. In addition to that, we are actually client to the project. For the last six years, we have been working with the development board inputting into the design of the hospital. We have inputted into the business cases and the ICT that is required to deliver this hospital. When the business case was approved by Government in 2017, we clearly indicated that we had to bring on expertise to take on the client role to support the design and development of the hospital. What I have included in those costs are, for example, we have set up a new entity, Children's Health Ireland. We have had to dissolve the boards of two other voluntary hospitals and dissolve those organisations. All of the legal work and what we call the pre-commencement assessment and review process make up some of those costs. That is expertise in mergers, for example, and legal expertise that we would not have in Children's Health Ireland. Like the development board, these are short-term initiatives that we had to do. Besides providing the services to children - I appreciate that the work we are doing is challenging and we badly need this hospital because of that - we have to integrate the three children's hospitals. When we looked at major projects like this, there are not many in the world that merge three hospitals and then move them into a new hospital. If we do not get the integration correct, there will be challenges around that. We are working with the staff to get our clinical and corporate processes aligned and to align how we actually operate. This investment has been around standardising our models of care and a significant amount of it has been around ICT. That is the other remit we have. We are implementing projects now in the children's hospitals as single instances that we move into the children's hospital. It is investment that we need to make now to make it happen.

I understand that it is necessary to get that integration correct. The vast majority of people will understand that money needs to be spent on that side and on the physical side. The greatest disappointment is the delay in the facility becoming fully operational. What work is Children's Health Ireland doing to minimise the delay in opening the new national children's hospital or can that even be done at this stage? I know it is a few years away but clearly there is a learning curve here in respect of this delay. What is Children's Health Ireland doing and what can be done?

Ms Eilísh Hardiman

Maybe if I can clarify, this is not just around investing to open up the new services in Connolly, although that is a really important part. This integration is about merging hospitals and we know from national and international experiences that this can be a challenge. Something like 75% of mergers do not achieve success. Very early on, we were working on the process to be commenced as a single organisation, which we have just done this year. A significant amount of investment was to make that happen. When we opened up Connolly it afforded us an opportunity to have, for example, a single, unique identifier for all of the patients in Children's Health Ireland. That means that the patients can go to any of our facilities and the staff can see their records. It is a really important safety issue and also it is a really important matter when we are under pressure. We are now actually moving the patients and the staff around to where the resources are. We have invested-----

I am sorry but I have limited time. We have very deficient services at the moment.

Ms Eilísh Hardiman

Correct.

We are seeing serious problems with delays in children receiving care, even down to queues and pain management. We have a facility here that has been opened, yet the accident and emergency department-----

Ms Eilísh Hardiman

Urgent care is the name.

Urgent care is operating from 9 a.m. to 5 p.m., Monday to Friday. The service is not fully operational and may not be fully operational next year. There is a serious concern about the investment actually delivering the outcomes that would have been expected from it.

Ms Eilísh Hardiman

We have delivered and I want to demonstrate that to the Deputy. It has already been demonstrated by our waiting lists. The Deputy is right that we have long waiting lists. For example, general paediatrics is one of the services in which we have invested. They have developed new ways of working and are now using an automated system to look at their patients. In the last six months, we have reduced our general paediatrics waiting list by 35%. That has been done because the paediatricians are working across the cities and we are managing-----

That is Crumlin-----

Ms Eilísh Hardiman

Crumlin, Temple Street, Tallaght and Connolly. The most important part of it, I would say, is that we have some long waiters and we started with them first. Our long waiting lists, meaning anything over 12 months, which is the target set by the HSE and which should be shorter, we have managed to reduce that by 65% in five months. The reason we have done it is that we have new ways of working and new facilities open.

That is really important because these new ways of working are-----

Is the urgent care situation better or worse?

Ms Eilísh Hardiman

We have had horrendous pressures across all our hospitals. I acknowledge the experience of Deputy O'Connell and other families, for which we apologise. We are dealing with a significant pressure arising from the flu and respiratory illness winter season. Without the unit at Connolly hospital, it would have been an awful lot worse. That facility has allowed us to decompress some of the other emergency departments and move patients to wherever there are better facilities. We have also been able to move staff. That was possible because we have the same systems in place across the hospitals, so the staff are familiar with the set-up. In addition, we have an IT system which shows where all the beds are in each hospital. Our staff are now working in an integrated way. The important point to emphasise is that it takes a lot of time to plan and put things in place, but it means we will be ready to get working when we move to the new hospital.

Finally, will Ms Hardiman provide us with a note on the outstanding areas in which Children's Health Ireland has not fully recruited and what the profile is likely to be so that we have some understanding of how this investment will deliver better services?

Ms Eilísh Hardiman

I am happy to do so. We are working on a workforce plan. We acknowledge that there are challenges and that we need to start planning now for what we will be delivering in a few years' time.

Ms Hardiman should submit the information Deputy Murphy requested to the committee secretariat.

I am looking forward to the day when we have equal gender representation among witnesses, particularly in respect of the children's hospital. I preface every contribution I make at the committee with that comment. It is no reflection on the witnesses, but I am sometimes dismayed by the systems that allow inequality to persist.

I did not welcome the pictures the witnesses from the hospital development board showed us. They seem to have been misadvised on that point. The witnesses are here for the purposes of accountability. We do not need to see photographs of a construction site. What we do need to see is that the right processes are in place, there is proper accountability, we are not wasting any more money and, in particular, that other projects are not affected.

Were the witnesses from the hospital development board advised by a public relations company in respect of their attendance at today's meeting?

Mr. David Gunning

As the Deputy may be aware, Q4PR is an adviser to us on press, public and community affairs and a range of other issues. We take its advice on a regular basis.

Were the witnesses advised in regard to their attendance at this meeting?

Mr. David Gunning

We had a meeting.

Did the witnesses have what might be called a pre-meeting about how they would answer questions and present themselves today?

Mr. David Gunning

I do not know exactly but we certainly talked though some of the topics and issues.

Why was that necessary?

Mr. David Gunning

We want to make sure the answers we provide are as complete as possible and that we meet members' particular needs and requirements.

How much did the advice cost?

Mr. David Gunning

The Deputy will be aware that we have a multi-year agreement in place-----

Will Mr. Gunning remind me of the financial details? I have it in my head that the cost is something like €200,000 per year?

Mr. David Gunning

The cost of communications in 2018, including VAT, was €338,000. The figure for this year, up to October 2019, is €285,000.

Does that include training for the witnesses to appear before this committee, the health committee or any other committee?

Mr. David Gunning

The scope of work is much more than-----

Might we be given a copy of that scope of work?

Mr. David Gunning

I am happy to provide it. It is more about community and stakeholder engagement than Oireachtas committee meetings.

On page 21 of the accounts I see a reference to communications and community engagement. "Engagement" is a lovely word. How much of the total cost went into communications in terms of communicating press releases and training, as opposed to community engagement? The total figure for 2018 is €338,451, which is extraordinary.

Mr. David Gunning

I cannot give a breakdown today.

Will Mr. Gunning provide that information to the Chairman?

Mr. David Gunning

I am happy to provide a breakdown of the effort involved.

We all want to see the hospital up and running and I wish the witnesses all the best in that regard. We want moneys to be used efficiently so that so everyone can access a public health service. That is why we are here. The background to this is before my time but I understand the previous Committee of Public Accounts was assured that what happened before would never happen again. Not alone has it happened again but it is just as bad as the first time. I understand €30 million or €35 million was written off on the previous occasion and now we are dealing with the same issue again. I do not need photographs of construction sites but I do need to know the cost of the overall project and when mistakes are made and that the witnesses are learning from those mistakes. It is totally unacceptable to have that level of spending on the services of a public relations company. It is an absolute waste of taxpayers' money. The witnesses are here for the purposes of accountability. Our work should be done in a polite way and none of our questions should be put in a personalised fashion. However, the witnesses must be held to account at this committee and every committee before which they appear. They do not need to consult a public relations company for that purpose. There is something seriously wrong if they are resorting to that and, in this instance, they were ill advised on the question of producing photographs.

Mr. Gunning has undertaken to provide the committee with a breakdown of spending under the heading of communications and community engagement. Spending on other professional fees was €793,000 in 2018, which is a huge jump as far as I can see. What does that expenditure include? Does it include fees for external bodies?

Mr. Jim Farragher

The overall figure of €793,000 for professional fees is made up of a range of costs, including those relating to the adjudication and standing conciliator services associated with the project. These are professionals who are supporting the project-----

I have no problem with professionals being paid. I would just like a list of them to see where the moneys went. If Mr. Farragher does not have the information to hand, he might send it to the Chairman in due course.

Mr. Jim Farragher

We have that information and will send it to the committee.

On page 4 of the financial statement, we are told that the board set up a committee to consider and address the recommendations of the internal audit that was done by Mazars. Who is on that committee, how often does it meet, how is its work proceeding and is there a plan of implementation for the recommendations in the Mazars report?

Mr. Fred Barry

A sub-committee of the board was set up to address the implementation of the Mazars and the PwC recommendations.

I understand the PwC report cost almost €500,000. What was the cost of the audit by Mazars?

Mr. Fred Barry

There was a payment of €180,000 to Mazars in 2018, which includes its internal audit as well as other work it did.

The PwC report was the larger cost.

Mr. Fred Barry

Yes, but it is not in our accounts because it was commissioned by the HSE.

I will come back to the HSE witnesses on that point. Will Mr. Barry indicate the membership of the committee, how often it meets and the implementation plan for the recommendations?

Mr. Fred Barry

The committee was chaired by me and included other members of the board, with members of the executive reporting into it. We are finished as a committee because we have implemented all of the recommendations as they applied to the hospital board.

How often did the committee meet?

Mr. Fred Barry

It meant about monthly.

How many recommendations were there?

Mr. Fred Barry

There were six or seven PwC recommendations referred to us directly and they have all been implemented.

I thank Mr. Barry. There is a reference on page 4 to ongoing monitoring and review.

Formal procedures are in place. All of that is welcome. Mention is made of key risks and related controls being identified and processes being in place. What are the key risks and controls?

Mr. Fred Barry

Where we used to have an audit committee, we now have an audit and risk committee with a specific responsibility for monitoring risk management within the organisation. We have appointed an individual within the organisation as the risk officer to help identify and channel our responses to various risks. We are reviewing risk at the board meeting as a specific agenda item every month.

Is Mr. Barry in a position to say what risks have been identified?

Mr. Fred Barry

I will give the broad categories. The main risks and challenges facing the project relate to the commissioning, startup and certification of facilities where third party certification and validation are required, and the transfer of those facilities from us as a developer to Children's Health Ireland as their manager.

What does that mean in plain English?

Mr. Fred Barry

We are the developers, which means we are building the hospital and taking it through construction startup. We have to transfer everything over to Children's Health Ireland, which will be operating the hospital. The handing over and transition from the construction startup to operations poses a significant challenge for us all. Failing to get that right is a key risk.

Mr. Fred Barry

The risks are of things not working properly.

Why would they not work properly? What would not work properly? The development board has been appointed to build, design and furnish.

Mr. Fred Barry

Correct.

What are the risks?

Mr. Fred Barry

The risks are around the transfer of a built facility that meets the requirements we have set over to an operating entity that is expected to operate and manage this enormous, new and highly sophisticated building. I am not saying that there will be problems. Rather, I am saying that one of the risks we need to address is to ensure that we manage that properly.

Mr. Barry is saying that there is a process in place, including a risk and audit committee and a risk officer, to identify risks on an ongoing basis and to deal with them.

Mr. Fred Barry

And look to mitigate them.

We will not be taken by surprise in the future if a risk emerges that the board has not identified or dealt with.

Mr. Fred Barry

I hope not.

I sincerely hope not.

Mr. David Gunning

I am sorry, but I missed the first part of the Deputy's statement. She said: "We will not-----

"We will not be taken by surprise in the future".

Mr. David Gunning

I thank the Deputy for repeating that.

I thank the Chairman, who tried to clarify the issue of the overall structures at the beginning. We have the Department of Health, the HSE, CHI, which is a new statutory entity, and the witnesses' board. What is it called?

Mr. Fred Barry

The National Paediatric Hospital Development Board.

Is there also a children's hospital group board?

Ms Eilísh Hardiman

No. That was us. We were part of the hospital groups' establishment in 2013 as part of the HSE. Under our legislation, which commenced in January, the then Children's Hospital group, as well as the three hospitals of Our Lady's Children's Hospital, Crumlin, the Temple Street Children's University Hospital and the paediatric services at Tallaght Hospital, all moved into CHI.

CHI is the equivalent of the Saolta University Health Care Group in the west.

Ms Eilísh Hardiman

Correct.

It is the entity over a group of hospitals.

Ms Eilísh Hardiman

We are the group of hospitals.

Then there are the various structures. What happened to the group on the ground that had the philanthropic role and was trying to get extra money from McDonald's? I cannot remember the charity's exact name. The group was looking at ways of providing rooms for parents and research.

Mr. Jim Breslin

CHI has the statutory mandate for philanthropy.

Where did the other group go? There was another committee.

Ms Eilísh Hardiman

I might be able to help. I am not entirely sure but I will try to clarify. Is the Deputy referring to the charity for family accommodation?

That is the charity, but I understand that a group or committee was set up whose function was to raise funds from charities for research and development.

Ms Eilísh Hardiman

The charity for family accommodation is one group. Each of the three children's hospitals had its own foundation. Crumlin had its own foundation. Temple Street had its own-----

I am not interested in the foundations at the moment. Under these structures, I understood that there was another committee. I cannot remember its name. When the witnesses appeared before us previously, it was called the "Children's Project Group" or something. It sought out funds. Is there any group like that currently?

Mr. Jim Breslin

All I can say is that, in the statute setting up Children's Health Ireland, there is a specific function around philanthropy. It includes research and fundraising from philanthropy.

Maybe I am making a mistake, but the witnesses cannot clarify what the group was. They are saying that there is no group currently other than CHI, which has this function under statute. There is the NPHDB and the board of CHI. Is the chair of the latter the former president of NUI Galway?

Ms Eilísh Hardiman

Yes, Professor Jim Browne.

Is there gender equality on the board?

Ms Eilísh Hardiman

Yes. Of the board, 42% of members are female. Of my executive, 60% are female.

Lovely. Where are we with the philanthropy role? To preface my remarks, I have a major difficulty with the use of charity and philanthropy in a public hospital.

Ms Eilísh Hardiman

I am sorry, but what is the Deputy's question?

Tell me about the philanthropy role.

Ms Eilísh Hardiman

I will start with some of the history, which the Deputy seems to understand. Each of the three children's hospitals, as independent voluntary hospitals up until December of this year, had its own associated foundation. As part of our merger and integration of the three hospitals, the foundations have agreed to merge into one foundation. Speaking personally, I was delighted with that because I was the chief executive of a hospital - Tallaght Hospital - with three foundations. That was a positive change. The foundations were independent charities, but they were affiliated. The new foundation's sole purpose is to raise funds for us. Internationally, children's hospitals have a good reputation in that regard.

There is one foundation now, the role of which is to raise funds.

Ms Eilísh Hardiman

Correct, and the purpose of the funds is solely for Children's Health Ireland and to support research. Those are the primary reasons for raising funds.

Will the foundation be consolidated within CHI's accounts?

Ms Eilísh Hardiman

No. It is not a part of our organisation.

Will it appear before our committee?

Mr. Seamus McCarthy

I do not expect so.

There will be no scrutiny of that foundation.

Ms Eilísh Hardiman

The Charities Regulator regulates charities. It is through that process that accountability, oversight and scrutiny of those-----

I have heard that said before, but speaking as a member of this committee, I am not happy. Foundations have been set up within universities. Lately, Trinity College Dublin has "consolidated", I think is the word-----

Mr. Seamus McCarthy

They were-----

It had a separate foundation. When it appeared before us to go through its accounts, it had consolidated the foundation's accounts, meaning that we had "scrutiny" of same. Trinity has led the way. I do not believe that Maynooth University has a foundation. Did it consolidate? I cannot recall. The other universities have not done it yet. CHI is following a pattern of having a foundation that is not open to scrutiny by the Committee of Public Accounts.

Mr. Jim Breslin

I am happy to consider the emerging precedents in other sectors. One of our objectives was to have charitable status so that someone could give to the entity. If we can preserve the charitable status and consider the precedents that are emerging, we will look at the issue and revert to the committee.

It is important. In a hospital of this nature, the foundation's uses should be open to maximum scrutiny, particularly in respect of research and development.

Has it been confirmed how many rooms will be available for families? Are we still waiting on the never-never for that?

Mr. Phelim Devine

Within the base build of the hospital, there are 30 dedicated rooms for families, particularly pertaining to critical care. External to the hospital, which is not part of the NPHDB's remit, is the 53-bed family accommodation unit, which is to be built by the charity.

Mr. Phelim Devine

The charity.

Mr. Phelim Devine

Just to clarify, it made sense to agree that we build the foundations and the basement for that building but above basement level will be built by the charity.

Has that been agreed and the charity identified? Has a time been given for the building?

Mr. Jim Breslin

Negotiations are under way on the arrangements, costs and financing of that. We have asked the HSE to look at it in further detail and have not yet reached a conclusion. The Deputy knows from our previous discussions that the charity that is currently on the Crumlin site has put forward a proposal to run that accommodation.

What is the charity?

Mr. Jim Breslin

It is Ronald McDonald House Charities Ireland.

Let me go back to the fact that there are 30 rooms.

Dr. Emma Curtis

I will add that all of the individual bedrooms are single bedrooms with a patient bed. There is accommodation in all of the inpatient bedrooms for a parent.

Very good. Separately, there are 30 rooms.

Dr. Emma Curtis

That is right. There are not bedrooms or beds for parents in intensive care because of the nature of that care. There is extra accommodation, should it be required.

What was the number of rooms required for parents or families in the design? What is the required number of rooms?

Dr. Emma Curtis

Does the Deputy mean in the design?

What was the plan? What is the required complement?

Dr. Emma Curtis

We have planned for a parent bed in every individual bedroom. There will be a comfortable lounger-type armchair in intensive care so that parent who want to stay with their child can do so comfortably. It will not be an upright chair but one in which a parent can rest within the intensive care rooms. There are 30 extra rooms should it not suit a parent to stay in a child or young person's bedroom, or if the child is intensive care.

Why are the extra 53 rooms to be built by the charity needed?

Ms Eilísh Hardiman

I will answer that. We already have this facility in Crumlin Hospital. We have a 20-bed unit that has been run for the past 15 years and is a critical part of services for a children's hospital. We also have another facility near Temple Street. The charity is a part of a global network of charities that support family accommodation in children's hospitals. We mapped out how many beds we required and the charity has identified the increased requirements. There is a waiting list of families at the moment. We cannot accommodate the families.

I understand that, but-----

Ms Eilísh Hardiman

The charity has a model-----

I am more interested in the model of public medicine and what is required. I will come back, when asking my final questions, to ask about private rooms and the overall cost of the hospital. However, given the amount of public money involved, one would imagine that having enough rooms without relying on a charity would have been the kernel, central to the matter. Even if we are relying on the charity, I would have expected the charity to make arrangements according to what we want.

Ms Eilísh Hardiman

I need to be crystal clear. These rooms are to accommodate families, usually including siblings and others, who come to the hospital because a child is sick.

Ms Eilísh Hardiman

Hospitals are not funded to provide that type of accommodation but, because these are really sick children who come from all 32 counties and these families need to be together, this facility is provided by a charity in most children's hospitals.

It is additional accommodation, and that is very welcome in a sense as long as the charity comes under public scrutiny.

Ms Eilísh Hardiman

The State has not provided that service but it is integral. We had to build this in when designing the children's hospital. It has been included in the design and planning permission and the arrangement that is in place is that a charity provides it.

What will be the final cost of the hospital? I ask also, as I did on the previous occasion, about the number of private rooms for consultants to do private medicine. Those are my final two questions. The figure of €2 billion has been used. I do not want headlines, I want clarity. What do our guests think will be the final figure for the building costs when the hospital is handed over to Children's Health Ireland?

Mr. Fred Barry

The exact final cost of the hospital will depend on how events unfold in relation to residual risks where the State bears responsibility for the costs.

I agree, and Mr. Barry has been clear on that, but he must have some figure in his head. There must be a plan to cover those residual risks.

Mr. Fred Barry

The arrangement, if I can call it that, is that, if and when these residual risks unfold, we will turn to the Department and the Government for additional funding to go with them. That will happen if and when or as those risks arise.

Could it cost €2 billion?

Mr. Fred Barry

Theoretically, things could cost anything but that seems highly improbable.

It is highly improbable that it will cost €2 billion?

Mr. Fred Barry

Yes.

What about the number of private rooms?

Ms Eilísh Hardiman

There are no private designations to any of the 473 inpatient or day patient beds.

Will Ms Hardiman take this slowly, please?

Ms Eilísh Hardiman

There are no private designations to any of the 473 inpatient or day care beds in the new children's hospital. We have 119 clinical examination rooms in outpatients and, because of the legal obligations of our HR contracts with our consultants who have a B-type contract, those consultants are entitled to do 20% of their outpatient work on site. One suite, containing eight rooms, has been designated as private for us to honour that legal obligation. If there is any change on the policy, as we have said before, we are willing to implement it.

There is a legal obligation.

Ms Eilísh Hardiman

That is correct.

Are the consultants being charged for the suites?

Ms Eilísh Hardiman

The fee has not yet been agreed but the model has been agreed. There will be an operational fee for access to the rooms and other elements of the hospital, such as imaging and laboratories.

Will those consultants be charged market value for those facilities?

Yes. We have not actually gone into the cost but I am sure that will be the case. It is part of the commissioning phase.

To clarify, there are 119 clinical examination rooms?

Ms Eilísh Hardiman

There are 119 clinical examination rooms in outpatients.

What was the total of inpatient beds?

Ms Eilísh Hardiman

The total is 473 for inpatient and day cases.

Those are separate from the 119 outpatient rooms.

Ms Eilísh Hardiman

That is correct.

Are any of those inpatient beds designated for private use?

Ms Eilísh Hardiman

None of the beds is. They are all single rooms so there is no differentiation.

Does that mean there will be no payment from any of the private health insurers in respect of those rooms if none of them is designated as private?

Ms Eilísh Hardiman

How it works is that-----

Mr. Jim Breslin

I might jump in on that.

Ms Eilísh Hardiman

Please do.

Does Mr. Breslin get my question?

Mr. Jim Breslin

Yes.

Do existing hospitals get some payments from the VHI?

Mr. Jim Breslin

We are into the area of national policy so I might come in here.

I just want to know about money. Will money be paid in respect of those rooms by private health insurers?

Mr. Jim Breslin

As of today, money would be paid because the ability to charge the insurer is not linked to the room being private. We removed that about four years ago. If one is a private patient in a public hospital, even if one is not in a single room, it is a chargeable event and one can be charged for that. That is the position as of today.

Members of the Oireachtas Joint Committee on Health know that policy will change, going forward. Sláintecare has said we should remove private practice from public hospitals. We have commissioned a group, led by Donal de Buitléir, that has issued and published its report which is under consideration. The Minister has talked of his interest in taking an initiative, with consultants, to try to address the de Buitléir recommendations. That is likely to change the mix of private practice in our public hospitals, if not entirely eliminate it. The important thing is that the outpatient rooms that are being talked about as potentially available for private work are absolutely the same as all the other outpatient rooms. If they are not needed for private work, they will be used for public patients.

I just wanted to clarify that point about private health insurance.

I welcome our guests back. Deputy O'Connell and I had a slight feeling of déjà vu. We went around the houses last week but there are many more players today. To be fair to Mr. Gunning and Mr. Barry, they have taken on a poisoned chalice, in a way.

Some of the questions at the Joint Committee on Health, especially to Mr. Gunning about his history and where he was before this, were probably a tad unfair. I will not go anywhere near that. Sometimes the most obvious question is that one that needs to be asked, so my first question is not to Mr. Barry or Mr. Gunning, but to Dr. Curtis, Mr. Devine, Mr. Breslin, Mr. McGreal, Mr. Farragher, Mr. Morris, Mr. Sullivan and Ms Hardiman. "Reeling in the Years" is my favourite programme on television because it is a quick snapshot of a year in 25 minutes, with good music, usually, though not all the time. I am showing my age but someone here is older than me. We all know that the big issue here is the overrun in the costs of the hospital. All of the people I have named are here to do a job. Today is 5 December 2019, and could be played out on "Reeling in the Years" in the future, hence the link. Is there anything that any of the witnesses want to say to us and to the public watching? Are there any concerns that they would like to put on the record of the committee or to present to the public? Is there anything at all in what they know at this point regarding concerns about the spend on or timelines for this hospital? Do any of the witnesses have anything they would like to share with us? Now is the time to say so. If they do not say so, it is date-stamped. If anyone I have referred to would like to share anything, please tell us now.

Mr. Jim Breslin

I will speak for myself. The position is properly reflected in the PwC report and the chair's opening statement.

I have read this report inside-out. I have approximately 20 pages of notes from it as the people who attended the committee last week know. I have gone through it in depth. Not enough people have read it. I do not want a status report. I am asking if there is anybody here with any concerns extra and above what we know publicly.

Mr. Jim Breslin

Not extra and above. The concerns relate to the residual risks identified in the report. We have talked about family accommodation and finishing out those issues, philanthropy and so on. They are well-flagged at this stage.

For the record, everybody at the committee has no concerns outside of what is identified in this report or is public at present. Is that fair enough to say?

Mr. Dean Sullivan

Some risks are touched on in that report. We have talked about the risks that are flagged about capital costs.

Is there anything new relating to time? Does anybody have concerns that they know about which they need to air now? Everything will be known in the future anyway so I am asking if there is anything that we need to know about now.

Mr. Dean Sullivan

We have talked about some of the risks today. We talked about capital costs. We touched on the timeline for the three sides.

Is there anything new?

Mr. Dean Sullivan

There are two more that we have come across. It would be wrong, in a project and programme of this scale, to indicate or give assurance that there are no other risks.

I am not saying that.

Mr. Dean Sullivan

I did not say the Deputy is. I am trying to get there now.

Is there anything specific?

Mr. Dean Sullivan

There are two more specific things. The establishment of a new electronic health record arrangement that CHI is taking forward is undoubtedly a risk.

Deputy O'Connell and I have gone through this at the Joint Committee on Health.

Mr. Dean Sullivan

There is not just the challenge of procuring that but the challenge of getting it on the ground and working. The other risk I flagged up, which was picked up in response to some of the questions from Deputy Catherine Murphy, relates to the staffing of the existing site. That is small in comparison to the staffing of the new hospital. We are seeking to mitigate all of those risks but those are the risks I would put on the table.

We know about those two risks. We have talked about them at the Joint Committee on Health and it has been publicly aired. I will open this up to Mr. Barry and Mr. Gunning but, pardon the pun, they have probably been interrogated on this enough. Does anybody else want to say anything publicly to Ireland that is not known, that people are not aware of, or any concerns that they need to air?

Ms Eilísh Hardiman

We see the major strategic risks as being around the digitisation of healthcare, including electronic healthcare records and other elements, because this is a digital hospital. The other element is staffing. I would never underestimate the challenges of integrating and merging hospitals. Those are our big risks.

I am sorry for interrupting but I am caught for time. We know all of that. It has been aired publicly. Does anyone have anything else? No. That is fine.

I asked at last week's health committee meeting about additional claims for the project, so I presume Mr. Gunning or Mr. Barry will have an answer today. They outlined how just over €1 million to date has been paid in extra charges. Correct me if I am wrong because this is from memory since the Official Report of that meeting is not up yet. That was approximately 50% of overall claims. The witnesses acknowledged that smaller claims are quicker than larger claims, which is obvious to most people. I asked how much of the claims were based on the Connolly site rather than the main site and the witnesses were to come back to me but they have not yet. Presumably they have the answer to that.

Mr. Fred Barry

Virtually all of it related to the main site.

None of the claims is in Connolly.

Mr. Fred Barry

I would not say none but very little.

That is fair enough. I went into detail at the last meeting about the real issue, which is the design of the hospital and moving goalposts. That is where the costs are coming in. Anyone who really interrogates this document, particularly the most revealing pages - 26, 27 and 28 - which are about design, will see that. On the previous occasion, Mr. Barry and Mr. Gunning told me that the design of the hospital was more or less complete when the GMP was signed off.

Mr. Fred Barry

Correct.

Mr. Barry made a comment which I will have to follow up on. I did not on that day because I thought I would research it a bit more, which is the appropriate thing to do. He said that the design was almost agreed for the GMP but there were a few small things relating to the IFC. He might explain what the IFC is and the difference between that and the GMP.

Mr. Fred Barry

IFC is short for issued for construction. When one comes to the actual construction for the project, one issues a very large number of very detailed drawings and specifications, often integrating specific products that are being provided by the builder.

In layman's terms, is this a more detailed GMP?

Mr. Fred Barry

It is detailing of the design that is included within the GMP. A source of claims is a contractor submitting that the details differ significantly from, and are inconsistent with, the design.

That is very well explained. When the GMP was signed off, the IFC was, give or take-----

Mr. Fred Barry

The IFC follows the GMP.

I know. Did the IFC in any way retrospectively affect the GMP?

Mr. Fred Barry

That is a matter of negotiation.

If ever a question is going to be asked about this hospital, I believe that one is critical. It is the nub of this issue.

Mr. Fred Barry

Many of the claims have been submitted on the basis that the IFC documents differ from the design as agreed within the GMP.

There is a big difference between the IFC and GMP.

Mr. Fred Barry

Many claims are based on there being a difference. We have been arguing against them.

The contractors have an opinion that there is a big difference between the IFC and GMP.

Mr. Fred Barry

This brings us back to the employer's determination of those arguments.

Okay. Mr. Barry does not agree with it.

Mr. Fred Barry

So far, the determination has been largely that the issue for construction design is within the design-----

Okay, fair enough. On behalf of the taxpayer I hope Mr. Barry is right.

Mr. Fred Barry

I keep cautioning there is a long way to go on this.

On behalf of the taxpayer, I hope Mr. Barry is right but there is a credibility issue here. If it ends up being determined that the IFC cost was considerably away from the GMC, we will incur serious costs. In any project that would be correct, would it not?

Mr. Fred Barry

Correct.

I cannot correlate how, then, we ended up with a 63% uplift in payments to the design companies. According to this report, €27 million extra was paid to design companies, which is 63% more than what was agreed. In any correlation if we go from the GMP to the IFC cost - and I am sorry for all of the jargon but people who know this know what I am talking about and there are arguments with regard to a significant change that would have a massive impact on the costs - a key signal is the fact that 63% more than what was expected had to be paid for the design consultants who have designed the hospital to date in the first place. The correlation indicates that the IFC cost is way off. If there is a 63% differential, it would in indicate that we are heading for a big problem here.

Mr. Phelim Devine

I might come in and answer this. Deputy Kelly is probably referring to the settlement agreement that happened with the design team at the end of 2018, which is also-----

Which was way out, obviously.

Mr. Phelim Devine

-----referred to in the accounts.

Is it not way out?

Mr. Phelim Devine

Can I finish, please?

Can I ask a question though? Is it way out?

Mr. Phelim Devine

Let me finish, please.

I am sorry. Tone is an issue here. Is it way out or not?

Mr. Phelim Devine

GMP to IFC cost has nothing to do with the settlement agreed with the design team back in 2018. They are not related issues.

Mr. Phelim Devine

Okay?

I do not agree but go on.

Mr. Phelim Devine

I will tell the Deputy the way it is.

It is Mr. Devine's opinion.

Mr. Phelim Devine

Can we move on? At the end of 2018, the design team submitted claims to us in terms of additional services it felt it undertook, or was about to undertake, associated with the project when compared to when it tendered for the job back in 2014. The design team tendered for the job in 2014 and, through its lifescale, the job was supposed to finish in 2020 to 2021. There are entitlements for the design team on prolongation in accordance with the standard contract. We entered into a conciliation with the design team at the end of 2018. We appointed a conciliator. We stated our position and it stated its position and an agreement was made. In terms of what was agreed, the design team recovered €24.5 million, including VAT, or €19.9 million, excluding VAT. There were two categories in this. One category was variations it was entitled to as set out in the contract. These were prolongation of stages 2C and 3 up to the time of GMP and stage 4 because of the construction programme-----

It is all in the report, in fairness.

Mr. Phelim Devine

-----scope changes, proposed client changes undertaken and alternate contractual design proposals submitted. That came to approximately €15 million of the €24.5 million. The team is entitled to that under contract.

Scope changes.

Mr. Phelim Devine

Scope changes and prolongation of the programme.

Mr. Phelim Devine

Let me finish.

Mr. Devine is going to take up all of my time, I am afraid. That is the only reason I am-----

The Deputy should let him finish.

Mr. Phelim Devine

The second part of this was additional services that we decided to buy as a development board. They were about strengthening the employer's representative team and strengthening the design team leadership team. Some of this came out of what we experienced through the GMP process. We brought in many additional resident architects, engineers, quantity surveyors and inspectors to ensure we had the right quality in the project. We bought €9.5 million of additional services.

Effectively, it is what I said. It is an increase of 63% in the design costs. Is that accurate?

Mr. Phelim Devine

Correct.

That is just fact and it is what it is.

Mr. Phelim Devine

It is a fact, yes.

I believe the correlation I outlined is accurate. I asked my next question last week and I hope Mr. Barry has had a week to reflect on it because transparency is an issue. The board is changing and that is fair enough. Fair play to anybody who is volunteering for this job, as I said on the that occasion. I thank them because it is not an easy role to jump into. In fairness to Mr. Barry jumping into this role, when he got the phone call, he had to think about it for a while. This is a very important question and that is the reason he sat down with Q4 PR but I will get on to that in a while. Is the board strengthened or weakened by the fact the head of procurement in Ireland is no longer on it? I am not asking about the person but the role. Is the board strengthened or weakened by the fact the head of procurement in the Department of Public Expenditure and Reform, who is the most senior person in Ireland when it comes to procurement, is no longer on it? On the previous occasion we were told much of the procurement is out of the way and while I am not sure whether I accept it, I accept it as an answer. I am not going to dwell on this. Is the board strengthened or weakened by the fact the role is no longer part of it?

Mr. Fred Barry

Could I reference what we are seeking in the replacement board members? Perhaps that is the way to address the question without making comments about any individual.

I am not asking Mr. Barry to making a comment about any individual.

Mr. Fred Barry

Excellent.

I am asking him a very simple question. Is the board strengthened or weakened? Mr. Barry is a skilled person who has been in front of committees for years. He is one of the best people I have ever seen for coming in front of committees and answering questions, to be fair to him. This is a very specific question that I am asking and the country is watching. Is the board strengthened or weakened by the fact the role is no longer on it?

Mr. Fred Barry

I understand-----

By the way, the Government said publicly in the past that the reason the role was on the board was specifically because it needed to be and it was a good idea.

Mr. Fred Barry

I have no doubt it was a good idea but I do not want to compare the qualities of one individual leaving the board with the person who might come onto the board.

This is about the seventh or eighth time. I am not asking Mr. Barry to do that. It is a very simple question. If he does not want to answer, that is fine. Well, it is not fine but I will accept Mr. Barry does not want to answer it. Is the board strengthened or weakened by the fact the role is no longer part of it? It is a pretty basic question.

Mr. Fred Barry

If the Deputy can accept I do not want to answer the question, perhaps that is the best way to proceed.

I do not know what to say to that, to be honest.

Mr. Barry obviously has a view but he is not going to share it. Does he have a view on it privately that he will not share? He has made it clear he will not share it.

Mr. Fred Barry

I have a view that I am quite willing to give publicly on the skill set we need from the incoming board members but I do not want to say anything in the context of offering a critique, good or bad, of an individual who has left. I am quite happy to say what I think the appropriate skill sets are for those we are seeking to bring onto the board at the moment.

Mr. Barry is not answering the question and we will move on.

In fairness to Mr. Barry, and it is my first time to be fair to him today on this one-----

The Chairman is always fair to him.

We did say at the beginning that Mr. Barry should not criticise or make charges against anyone-----

I am not asking him to do that.

-----or to make any comment in respect of an individual.

I am not asking him to make any comment. In fairness, the Government made a decision that this specific role should be part of the board and it is no longer part of the board. Is the board weakened or strengthened by this? It is a pretty basic question. It is not being answered. We will move on.

If Mr. Barry can answer without reference to the person. What skills are-----

Mr. Fred Barry

As far as I know, I am not allowed to make a comment on Government policy.

No, you are not. Neither is the Secretary General.

Even though he has.

We know that and we will come back to it.

I will move on because, in fairness, we have washed that. With regard to the hospital, the services being brought in and the cabling and mechanical works, has there been any change in the design of the corridors or rooms in the very recent past with regard to mechanical or electrical works?

Deputy O'Connell wants to get in before the voting starts.

I am finishing up. I have a few quick questions.

The Deputy should put the questions so that Deputy O'Connell can get in.

I have a question for Mr. Sullivan. He is the deputy director general and head of strategy and planning. Future capital investment is generally planned five years ahead. This year a three-year plan has been released ten months late. Can Mr. Sullivan say on the record whether the delivery time of any capital project related to the HSE anywhere in Ireland been impacted by the spend on the hospital? That is my second last question.

My last question is for the chairman of the board. I asked this at our last meeting but I wish to put it on the record. The minutes of a meeting on 3 April state that a presentation was made by the design team to the finance and construction committee. It was reported that provisional findings had identified additional monetary risk. I asked for the presentation and for the minutes of the procurement subcommittee on 29 April. Mr. Barry said he would not supply us with the complete report but he would redact it and supply the minutes. They have not yet been received. Can he please provide them? Those two questions were directed to Mr. Sullivan.

In response to Deputy Connolly the witnesses said they would outline the scope of the work of Q4 Public Relations. I wish to echo that request. The documents the witnesses supply must predate today. They cannot be written up now.

Mr. Dean Sullivan

I will take the first question. There have been no changes to the corridors or rooms within the hospital since the guaranteed maximum price, GMP, was agreed. There have been no impacts associated with mechanical and electrical works.

Mr. Phelim Devine

In response to the Deputy's second question, I note that additional funding was provided by the Government for 2019 and 2020 to mitigate the risk he has flagged.

In Mr. Sullivan's opinion there will not be a single capital project in the whole of Ireland in the next five years whose timeline will be impacted in any way by the national children's hospital. Is that correct?

Mr. Dean Sullivan

That will depend on funding in future years.

At this moment in time-----

Mr. Dean Sullivan

At this point in time, funding has been provided for 2019 and 2020-----

Nothing has reached Mr. Sullivan's desk to indicate that a project will have to be pushed back. There has been nothing like that.

Mr. Dean Sullivan

There has been nothing as black and white as that.

At the outset I wish to state that I have been a long-term supporter of the children's hospital and of locating it on the St. James's Hospital site. My support has been based on the recommendation of a tri-located model with the capacity to include a maternity hospital and an adult hospital on the site. This will mean children can be born and transferred while women who have babies do not have to be separated from them. All the evidence that has been presented to me, mostly through Professor Hardiman-----

Ms Eilísh Hardiman

It is not yet "Professor Hardiman".

After this it definitely will be. We will give Ms Hardiman an honorary title. Once I committed myself to studying all the information I was convinced that this was the right place to put the hospital. I was given a document at the Oireachtas Committee on Health about four years ago. It stated that about 75% of the patient cohort came from the greater Dublin area. I do not care what trouble I get into. I cannot get into any more trouble than last week. Anyone who tries to reverse out of the hospital's current position is really doing a disservice to the children of Ireland. Despite some media reports, I have been a user of Our Lady's Children's Hospital, Crumlin for ten years. I have been an inpatient and a day patient. I have used the cardiac facilities in the medical tower, the accident and emergency department and everything bar the oncology unit, touch wood. I am fully aware of the challenges children are facing. This is about children. I do not see this as a poisoned chalice but as a wonderful opportunity to deliver something that successive Governments, boards and groups have failed to deliver. I recognise the huge challenges. I have sat in so many meetings about the children's hospital. I understand that we need to get value for taxpayers' money and we need the best possible hospital for our children, but the constant pushback against providing this only serves to damage outcomes for the children of Ireland. While our role is to interrogate this process, when any of us criticise the progress of the hospital we have to be very conscious of how much we needed it when it was first mooted. Perhaps Ms Hardiman could outline this. Consider the changes that have taken place at Temple Street Children's University Hospital and Crumlin. We still have not delivered. I remember seeing surgical pods being installed at Crumlin ten years ago and thinking it was a waste as we were going to build a hospital. Ten years later we do not have that hospital. For the record, I would like to encourage the board to keep going to get this delivered. However everyone should consider the children who have missed out due to the persistent delays that have plagued this project.

Turning to the Children's Health Ireland, CHI, it is very positive that there has been a 35% reduction in general paediatric waiting lasts in the last six months. Can we replicate that over the next six months or is that just a push to the start line? Similarly, there has been a reduction of 65% in the 12-month waiting list. Can we keep pushing in that direction or have we reached a saturation point?

Ms Eilísh Hardiman

I thank the Deputy for the opportunity to elaborate on that. Our board has taken this very seriously. With due credit to the previous hospitals, we tend to stay within our limits financially. We do our best around safety issues, which are really important. Access is one area in which we must make improvements. Our overall waiting list for outpatients has reduced by 8% this year. The biggest reduction has been in the number waiting for longer than 12 months. That has decreased by 12%. This does not just apply to general paediatrics.

As I was saying, general paediatrics is the one specialty to be based at Connolly Hospital Blanchardstown in which we have made early investment into new ways of working. Staff there work virtually. There are virtual triage clinics and patients are moved to the next available slot. There is central referral so a patient is not referred to a particular doctor. Whoever has the shortest list gets the next patient. It is a much more efficient way of working. Clinics have now been set up at Connolly that do not need paper. If the patient has been in another hospital, his or her records are scanned and sent over. We do not have vans of paper going from place to place. This new way of working needed investment.

I can assure the committee that we have been successful in reducing our waiting lists through initiatives with the HSE. We are definitely starting to make an impact. The facility in Tallaght will be opening next year. To be quite honest, our biggest issue is the constraints of the facilities. We are trying to implement some strategic initiatives between now and 2023 so that we do not come into this hospital with long waiting lists. We want to start successfully and be able to implement the services that the children and families of Ireland deserve, as Deputy O'Connell says. Our staff deserve to be working in those facilities as well.

To summarise Ms Hardiman's answers, staff in various sites are operating according to different protocols, with different ways of getting paid, different time schedules and different levels of management. CHI is streamlining practices so that staff can be transferred to the new hospital without a fuss about name tags, pay packets or practices.

Ms Eilísh Hardiman

Yes.

This is absolutely necessary in order to integrate the services. The issue of parents' rooms constantly comes up. All rooms outside of the intensive care unit and the high dependency unit have facilities for parents. On the Crumlin road there is a charitable organisation providing facilities where parents or other children can stay. For the benefit of people who have never been in that situation, parents need to wash clothes, feed their children and feed themselves. I have never used Ronald McDonald House because I am based in Dublin, but the facilities there are absolutely essential to supporting families who come from further away so they can live their lives without incurring huge hotel expenses.

This might be a question for the Department but is there any issue with Children's Health Ireland being a section 38 organisation in terms of the committee's access to its accounts in the future?

Mr. Seamus McCarthy

I will be the auditor of Children's Health Ireland and reporting to the committee.

That is fine. I wanted to clarify that in light of other questions that have been put.

Mr. Jim Breslin

That is a development on the constituent hospitals. We have moved from Crumlin Hospital, Temple Street hospital and the paediatric part of Tallaght Hospital being voluntary hospitals, with their full participation, into something that is a public body. That is quite a step to have made.

Mr. Seamus McCarthy

As of now, I audit five of the section 38 hospitals. I do not audit the rest of them.

On the ICT and the single unique identifier for children, would it be true to say this is a template for the future for adult healthcare? Are we trying to get it right with the children's identifier first or are both happening in tandem in the Department?

Mr. Jim Breslin

This is instead of doing a big bang. There was an option at one stage of purchasing a single electronic health record, EHR, for the whole country. The children's hospital, as we all know, has many unique features. Children's Health Ireland will procure an EHR for the children's hospital but we will build linkages to the national project and how that gets rolled out so that there is compatibility. For example, the individual identifiers will be the same and they will use the same standards and so on, but the purchase and deployment will be separate from the children's hospital deployment.

Again, I would not like the wrong message to go out from the committee on the 63% increase in design costs. My understanding from what Mr. Devine said is that the increase was to get more design because it precedes the GMP and the detailed drawings for where the plugs and cables go. It is not really the case that it was a pure increase but the costs increased by 63% to get more design. There was almost an impression given that it was a waste or nothing was got in return for the increase. Perhaps that could be clarified so that an incorrect headline does not go out from here.

Mr. Phelim Devine

There were two aspects to it. The first aspect was that a large part of the €15 million cost I talked about was for the prolongation. We have our design team for an extra two years. The numbers were mentioned and we are talking about 100 to 200 people. Those prolongation periods happened during the intense period between going to tender and then finalising the GMP. They had 200 people working on the job for an extra six months. When we get to this stage, which is all about the construction and implementation, there are probably over 100 people working for another year or year and a half on that. That is where most of the cost was generated. The timeline of the project has extended out for different reasons.

The second aspect was the €9.5 million cost. As a development board, taking our experience of the GMP and what is in the PricewaterhouseCoopers report, we strengthened certain aspects of the design team and the capability within that team. We decided, after looking at other large-scale projects internationally, that we needed additional people from the design team checking quality on site, more than we had allowed for in 2014. There was an impact there in that the building control regulations were only in their infancy in 2014 when we tendered the job. This is a highly complex project. There are 6,000 rooms, every one of which has medical services in it. We need to do a huge amount of assurance and checking to ensure our contractors complete the job and commission the hospital to the right standards so we hand over a fit-for-purpose hospital to Children's Health Ireland.

It is worth noting that the-----

Mr. Phelim Devine

We brought in extra people to give us better assurance on the end product.

The consequences of it not being right are extremely serious-----

Mr. Phelim Devine

There are huge consequences.

-----for the outcomes for children. The importance of having the right pipe attached to the right gas line, for example, is crucial.

A vote has been called in the Dáil.

On dealing with the period between now and when we have the new hospital, I welcome the reduction in the fee for the urgent care centres, which has gone from €100 to €75 to make the service more affordable. We need to focus on expanding the services at Connolly Hospital in the short-term because the reality is that if we have some kind of serious outbreak in the coming months or even next winter before the hospital is ready, we will have challenging outcomes for children.

We have not completed our work at this stage. Deputies must go to vote. We will resume at 2.15 p.m. and I expect we will be out of here by 3 p.m. We thought we might have finished by now but not all the questions have been asked. We will have a good half hour of discussion after the voting session. We had hoped to be finished by lunchtime but, as with projects, they do not always finish on time. We will inform the guests who are due in at 2.30 p.m. that we now expect to begin our discussion with them at 3 p.m.

Sitting suspended at 1.16 p.m. and resumed at 2.23 p.m.

We resume our discussion in respect of the National Paediatric Hospital Development Board and other groups associated with the hospital. A number of members spoke earlier. As Chairman, I normally wait and allow the other members to ask their questions before I do. Some members then add further questions while I am asking mine. I have a number of questions before I get into the specifics of the accounts. Can someone call out the list of directors of the National Paediatric Hospital Development Board?

Mr. Fred Barry

There is myself, Tim Bouchier Hayes, Anne Butler, Karl Kent, John Cole, Liam Woods and Lorcan Birthistle.

Mr. Barry mentioned earlier that there are some vacancies on the board.

Mr. Fred Barry

There are six vacancies.

So just over half the positions on the board are filled.

Mr. Fred Barry

Yes.

What is the quorum for a meeting?

Mr. Fred Barry

We are kept busy. The quorum for a meeting is five members.

Does the board have trouble getting a quorum?

Mr. Fred Barry

We have succeeded in getting a quorum?

Are there quorums there for board meetings?

Mr. Fred Barry

Yes, we have managed it so far but it is tight.

There are six vacancies on the board-----

Mr. Fred Barry

Yes, indeed.

-----responsible for the largest capital construction project in the State. The State has set up a body to manage that project and we find that there are currently only seven out of 13 directors on the board. That says a great deal. I will put a question to Mr. Breslin in a moment because it is not Mr. Barry's fault that there are not enough members on the board. When did these members join the board? I do not need the date. The approximate month will do.

Mr. Fred Barry

Other than myself, as far as I know, all of the other board members have been there for a fairly long time.

I will turn now to Mr. Breslin.

Mr. Seamus McCarthy

If we turn to the financial statements on page 8, four members were appointed on 2 August 2013. Liam Woods became an ordinary member on 4 March 2015 and, for completeness, Mr. Birthistle on 2 February 2016. Then there was Mr. Barry's appointment, which was this year.

The of directors are the people who are ultimately responsible. We will go down through this list, which has been presented in the context of the 2018 financial statements. Tom Costello, the former chairperson, has gone.

Mr. Fred Barry

He has gone, yes.

Tim Bouchier Hayes and John Cole are still there. What about Brian Fitzgerald?

Mr. Fred Barry

Brian Fitzgerald has gone.

Karl Kent is there. What about John Martin?

Mr. Fred Barry

John Martin has gone.

What about Paul Quinn.

Mr. Fred Barry

Paul Quinn has gone.

Anne Butler is there.

Mr. Fred Barry

Yes.

What about Marguerite Sayers?

Mr. Fred Barry

Marguerite Sayers has gone.

What about Professor Hilary Hoey?

Mr. Fred Barry

Professor Hourihane has gone.

No, Professor Hilary Hoey.

Mr. Fred Barry

My apologies.

Mr. Jim Breslin

She was replaced.

Mr. Fred Barry

She was replaced by a-----

No, she has left according to the list I am looking at in the board's annual financial statements. She has gone. Liam Woods is there.

Mr. Fred Barry

He is there.

What about Lorcan Birthistle?

Mr. Fred Barry

He is there.

What about Jonathan Hourihane?

Mr. Fred Barry

He has gone.

Out of the 13 that were there, seven have gone and one has been replaced. What is the Department of Health's position on this? Mr. Breslin will mention the Public Appointments Service process but a board of directors for the national children's hospital construction project is a matter of urgency. Every week that passes, costs are being incurred. How is the Department of Health allowing this to continue?

Mr. Jim Breslin

Over the course of the year, there has been significant changeover in the board, with the new chair and the previous chair resigning, etc.. We have concluded the period for expressions of interest and will be submitting names to the Minister this month in to fill out the rest of the board. It was important to work for the new chair to identify the competencies which he wants to see on the board and which, on the basis of the PwC report, are required. We have done that and gone through the State boards process which is almost concluded.

We have gone through the State boards Public Appointments Service process.

Mr. Jim Breslin

This is where the Public Appointment Service advertises.

Did many people apply?

Mr. Jim Breslin

I am told that there is a good level of interest. I have not seen the quality because I am not part of the nominations process and have not seen the applications. The number is good.

When did that process start?

Mr. Jim Breslin

The closing date was 15 November, so probably in October.

Some of these people have been gone since last February.

Mr. Jim Breslin

Yes, some have been gone since last February.

Why did it take nine months to start filling the vacancies?

Mr. Jim Breslin

Tom Costello went in February and has been replaced by-----

Mr. Barry.

Mr. Jim Breslin

There were people who went at the end of May, people who went over the summer and people who left in October.

Mr. Jim Breslin

I have been before this committee and the health committee previously and I was asked how I was going to address the PwC report and strengthen the board. There was an entire board there and the Minister had no flexibility to make new appointments beyond what was in place. We might not have planned it this way but-----

Mr. Breslin is telling me that it is a good thing that they have all left. He is the master here.

Mr. Jim Breslin

It allows us to stand back at this period in the development, which is a different one to when we started, in looking at what are the remaining competencies and skills that we might want. Hopefully, through the expressions of interest process, we will get a very good set of additions to the board.

I am aware that Mr. Barry probably did not get an opportunity to answer the question or may not have wanted to answer it, but the skills that were necessary at the earliest stage of the project, in terms of procurement, etc., might not be as critical now because it is a question of seeing the project to completion.

Mr. Fred Barry

That is correct. In the early stages of the project, the conceptual design, development, planning, getting the statutory approval to build and procurement would have been very much in the board's considerations. Now we are moving more into the supervision of construction, construction safety and quality, validation and so on, together with start-up and transfer.

There is a body of procurement of medical equipment and so on yet to be undertaken

We will come to future procurement.

Mr. Fred Barry

There is expertise available to us from the HSE and CHI in respect of that equipment.

The HSE is expert at not complying with procurement rules. Between 25% and 40% of its procurement is non-compliant. The committee deals with its procurement every year. It tops the list in terms of non-compliance with procurement rules, as the Comptroller and Auditor General will confirm. Some 24% of procurement within a sample he took last year was non-compliant. I say that as a warning that Mr. Barry should not rely on the HSE in respect of compliance. If he, as chairman of the board, is looking for people to advise on complying with procurement rules, the HSE is not necessarily the right choice.

Mr. Fred Barry

We do not look to the HSE for procurement administration, which is within our competence. Rather, we will seek its technical input on appropriate equipment.

I will turn to my next question. The board signed off on the accounts on 9 October.

Mr. Fred Barry

We did.

As Chairman of the Committee of Public Accounts, I note it is important that this committee receive information on this critical project in a more timely fashion. It is unacceptable for the committee to have to wait nine or ten months after year end before it can see the financial statements for last year of an organisation as sensitive as this. I ask that the accounts for 2019 be submitted to the Comptroller and Auditor General by the end of February and that the Comptroller and Auditor General give them priority. I cannot dictate the workload of the Comptroller and Auditor General and I acknowledge that the appropriation accounts must be done but the HSE and the NTMA are given priority. Similar priority should be given to the largest capital project in the State. I do not know who will be here this time next year, but the Oireachtas should not have to wait until October of next year to see the financial statements for the period that will conclude in three weeks' time. Mr. Barry gets my point. There should be more urgency. It is possible that the change of directors or another matter was the reason for the delay. Many organisations appear before the committee. I consider this to be a critical organisation in which there is a significant amount of public interest. It is good for the reputation of the project if information is provided in a timely manner but it damages its reputation if information must be dragged out. I am making that point in a positive way. I ask Mr. Barry to try to get ahead of the curve on these matters.

This is the first time Ms Hardiman has appeared before the committee. Children's Health Ireland, CHI, deals with the hospitals in Crumlin, Temple Street, Tallaght and Blanchardstown. What about children who live outside Dublin and those who are sick in hospitals elsewhere in the country? Do they fall under the umbrella of CHI?

Ms Eilísh Hardiman

No. We cover local services with local secondary hospitals for the greater Dublin area, including counties Meath, Dublin, Kildare and Wicklow.

CHI covers Dublin and some eastern counties.

Ms Eilísh Hardiman

Yes. We cover local services along the eastern seaboard and in the greater Dublin area. Patients in Cork would go to Cork University Hospital, which has a children's unit, while those in the west would go to a hospital in Galway or Limerick, for example. Those regional hospitals have paediatric units and there are smaller paediatric units in the remainder of the system. That is one part of our job. The other part-----

It is not part of the job of CHI. Those hospitals fall outside its remit.

Ms Eilísh Hardiman

That is correct. However, there is a plan to take a network approach to the delivery of services. What is part of our job is all of the national services. We are the only hospital in the system that has all of the national services in one organisation. The sickest children, who comprise 25%, are all in our group. A very sick baby in Cork who needs intensive care will come to us. Children with complex and chronic illnesses or a rare disease come to us. We deal with all of the national services, as well as some for Northern Ireland. In addition, we provide secondary care in the greater Dublin area.

Ms Hardiman referred to Ireland east. The impression was given earlier in the meeting that files and patient records have been integrated such that there are no paper records but people from outside the greater Dublin area will not be part of the patient integrated system and as such, will have paper files. Ms Hardiman gave an impression that everything goes on electronically but everyone from outside the eastern region will only have a paper file, as their records have not been not integrated.

Ms Eilísh Hardiman

I thank the Chairman for giving me an opportunity to clarify this issue. We have put in a patient administration system such that all of our 1.2 million records are on one administration system.

Are there 1.2 million children or records?

Ms Eilísh Hardiman

Records.

How many children does that cover?

Ms Eilísh Hardiman

Most of them relate to children. They are our historical records. They are held on an administrative system. We are going to purchase a clinical system to maintain clinical records, including medications and so on. As Mr. Breslin outlined, there initially was a plan for a national electronic healthcare record but it was agreed for us to proceed with our system. Interoperability is very important for us. The records of many children born in four of the maternity hospitals are stored on an electronic system. We must have a process whereby files can be transferred to ensure a continuity of care. Our preference would be for all of the hospitals to be able to link up-----

That will not happen between now and the opening of the new children's hospital. It is further down the road.

Ms Eilísh Hardiman

There is a separate process to progress the national electronic healthcare record.

For children.

Ms Eilísh Hardiman

No. For outside-----

That is a long time away. It is being done in parts. It has been indicated that it is not being done in one job. It could take a decade for it to be completed.

Mr. Jim Breslin

The regional paediatric units would be in scope for deployment of the children's hospital solution.

I ask Mr. Breslin to repeat that in English.

Mr. Jim Breslin

That means that we will have to make a decision on the matter but when the children's hospital procures and develops its electronic health record, which will be specific to children and will have non-standard features, the regional units outside CHI also will be able to deploy that. We will not go about reinventing the wheel.

Consequently, in due course but not yet, the records held by a hospital in Portlaoise on a child who then comes up to Dublin will be compatible.

Reference was made to 4,000 staff being under CHI. Whose staff are they?

Ms Eilísh Hardiman

The board of Children's Health Ireland is the employing authority of those staff.

Were they HSE employees?

Ms Eilísh Hardiman

No.

Where did they come from?

Ms Eilísh Hardiman

The three children's hospitals. The boards of Our Lady's Children's Hospital, Crumlin, Temple Street and Tallaght employed staff. Under the legislation governing CHI, the assets and liabilities of those voluntary hospitals, including staff, legally transferred to us as a State body.

CHI pays them now.

Ms Eilísh Hardiman

They are all on our payroll and all report to one board and one executive.

Where is CHI based?

Ms Eilísh Hardiman

We are based beside the new children's hospital, in the same building as our colleagues on the National Paediatric Hospital Development Board. While we occupy half of the building, we spend much of our time out in the hospitals.

Is payroll and so on centralised through CHI?

Ms Eilísh Hardiman

It is still run through the three hospitals. That is part of our merger and we now are starting to move to a single payroll. When I talk about integration, that is what I mean.

I thank Ms Hardiman. I wanted to clarify that.

What happens when the children become adults? Where do their records go?

Ms Eilísh Hardiman

We have transition services. If they are local, they will transition to the local services. That means they will go to any of the hospitals in the greater Dublin area. For those in receipt of specialist care, we have transition arrangements with some of the adult hospitals that have specialists for rare diseases, for example. We have a lot of connections with St. James's Hospital around cancer and haematology because it has the national adult services in those areas. That is how we work.

The next question is directed to Mr. Barry or whoever wants to deal with it. On the financial statements, I wish to deal with capital commitments, which appear on page 25. In January of this year, the witnesses' predecessors appeared before the committee and on that day, we were given the famous figure of €1.433 billion, which was put together over the lunch break and revealed when the committee reconvened.

I have quite a few questions in this area. The central paragraph on page 35 of the report states: "Up to the end of 2017, the Phase A of the construction contract was awarded which primarily supported the site enabling works of the project." We understand that. It refers to the ground works, underground work, a car park. It is not all overground. Is phase A complete?

Mr. Phelim Devine

It is. It is part of the instruction for phase B, which is the GMP phase.

I am focusing on phase A first.

Mr. Phelim Devine

Phase A is complete.

What was the total cost of phase A?

Mr. Phelim Devine

I will have to come back to the Chairman with an exact figure but it was approximately-----

Mr. Phelim Devine

-----€82 million excluding VAT. I do not have the actual cost.

I am reading the information we got from the board and from our periodic report No. 6. Paragraph H.10 of our report says:

Members questioned the cost of Phase A, the substructure, in relation to the overall project. The NPHDB stated that Phase A works were approximately €100m, including VAT, of all project costs. This represents approximately 7% of the current construction cost estimate of €1.4 billion.

That was several months ago. The board was able to give us that cost after the main meeting. It was an approximate figure at that time. There are several obvious questions. These are the financial statements. There is a reference to phase A having been completed. My question is simple. What was the final cost for phase A?

Mr. Fred Barry

We will get the exact cost for the Chairman.

It is going to make the rest of my questioning difficult if I cannot get the cost of what has already been completed, never mind-----

Mr. Fred Barry

We have no intention of not giving the Chairman that cost.

I would have thought that somebody would know the cost. We have this in our report. The board has not told us that it had any problem with its figures. We got these figures from the board; we did not make them up. It says that costs for phase A were approximately €100 million, including VAT. That would be equal to €85 million, €86 million or €87 million plus VAT.

Mr. Fred Barry

I have just confirmed that the approximate figure Mr. Devine gave the Chairman excluded VAT. If one adds the VAT, it is very close to the figure the committee previously had.

What does Mr. Barry believe the full figure is including VAT?

Mr. Fred Barry

As I have said-----

I am not tying him to that €100 million.

Mr. Fred Barry

The €82 million plus VAT is approximately-----

That is €100 million.

Mr. Fred Barry

It is close to €100 million.

Mr. Phelim Devine

The approximate figure of €82 million excluding VAT would be €100.86 million including VAT. It is pretty much the same figure.

We will say it is €109 million.

Mr. Fred Barry

No, it is €100.86 million.

It is €100 million.

Mr. Fred Barry

Yes.

Mr. Phelim Devine

It is effectively the same figure. We will come back with the exact amount.

The figure we had in our periodic report some time ago stands.

Mr. Fred Barry

Yes.

That is okay. Given that this phase has been completed, can the board give us the breakdown of that figure between the main contractor and other contractors? Do the witnesses have a breakdown of that €100 million?

Mr. Fred Barry

We can get a breakdown for the Chairman.

We want to get it.

Mr. Fred Barry

The committee will get it.

I have a difficulty as Chairman of the Committee of Public Accounts. We are looking at the board's 2018 accounts. We have done a periodic report and the board has been in here twice. This is its third time before the committee this year. It was here at the beginning of January and in May. We did a periodic report based on figures provided in respect of the board. I asked a basic question. We spent some time this morning talking about the estimates for the future. I am asking about the part of the project that has been completed. I am sitting here as Chairman looking at the board's accounts in respect of the completed works and I am being told that I cannot be given a breakdown of the €100 million. That is not a good place for us to be in. Does Mr. Barry understand my point?

Mr. Fred Barry

I am not in any way saying that we will not give the Chairman a breakdown.

I know that.

Mr. Fred Barry

We absolutely will.

I would have thought that somebody coming in with the 2018 financial statements that have been signed off by the board, audited, approved by Cabinet, lodged with the Oireachtas, noted and presented at the committee would be able to give us information on any figure within those accounts. That is what the Committee of Public Accounts is about. Getting a set of accounts is just the start of the meeting. We give our thanks and note that we have them on file and then delve into and analyse the accounts. The first question I asked referred to the board's note which said that phase A, which related to the substructure, had been completed. I asked whether we could have a breakdown of the costs now that it has been completed. That is what this committee is for. We are here to ask those questions. The Committee of Public Accounts expects answers to such questions today, not in ten days' time. Doe the witnesses get my point? They might not like that point but I am making it to everyone collectively. I will come to Mr. Breslin because he is the chairman of the children's hospital project programme board. Does he know the cost of phase A or can he give me a breakdown?

Mr. Jim Breslin

I know the cost of phase A but I do not know the broken-down figures the Chairman has asked for. It is something we could come up with pretty quickly. We will seek to get it before the committee finishes this evening.

Whatever. We might not be here for too much longer. I am expressing the frustration of all members here today. We were here last January and we extracted the figure of €1.433 billion at that meeting. We have not been given one single new figure today, 11 months on. There is a bit of frustration on this side of the table. We have a set of audited accounts and when I asked my first question about them, I expected a breakdown to be available today. It is going to come and that is fine but I believe Mr. Breslin sees my point.

Mr. Jim Breslin

This may be because the Chairman is asking about phase A, which does not relate to a particular year or to the current figures. It is part of the project. If the Chairman asked a question about expenditure on the project to date, including how much has been paid to the contractor, I believe people would be able to answer that.

Believe it or not, I am going there. I am starting from the board's financial statements, which include a reference to phase A. I am not inventing a question. I am asking for details on matters the board refers to in paragraph 7, page 35 of its financial statements. It is fine. I will take the figure of €100 million for now. We will get the breakdown. Can anyone indicate how much of this figure was paid to BAM? Was it 70% or 80%?

Mr. Phelim Devine

BAM was paid all of it. Phase A was all carried out under a single contract with BAM.

That is nice to know. That is the breakdown. Mr. Devine has answered that question. I will take that as an answer.

I am now moving on to phase B. I am reading on in the same paragraph: "In 2018, having agreed the GMP [guaranteed maximum price] for the project, the contract for the main works [which was held by BAM, if I am correct] was awarded for €887.7m (ex vat)". VAT came to €120 million so the contract comes to €1.007 billion, including VAT. I am reading the board's figures. Am I right in my figures? I believe I am.

Mr. Jim Farragher

That is the figure plus VAT, yes.

So that is €1.007 billion plus the €100 million.

Mr. Fred Barry

I believe that figure includes the €100 million.

Mr. Jim Farragher

We merged phase A into the main contract.

Mr. Phelim Devine

To clarify, phase A is part of the overall contract. When we tendered the job, it was for phase A with a following instruction for phase B but, at the end of the day, it is all one contract. The €887 million includes the €100 million spent on phase A.

That is fine. I am just trying to get information. Phase A is part of the overall thing. It had been referred to separately and I wondered whether it was a separate issue. I will now refer to the chart which provides the breakdown of the figure of €1.433 billion, which is on page 88 of our periodic report No.6. Do the witnesses have this chart in front of them?

Mr. Fred Barry

Yes.

Okay. It is just not up on the screen. There is a row titled "Net Main NCH Construction".

Does the big figure of €890 million refer to the BAM element?

Mr. Phelim Devine

Yes, that is correct.

Does the VAT come in under it?

Mr. Phelim Devine

Yes.

In that case, BAM is in line to get approximately €1 billion.

Mr. Phelim Devine

Yes.

I am just trying to get a breakdown of the figures. Page 26 of the financial statements refers to total capital commitments for contracts not provided in the financial statements. These are contracts that have been entered into but have not come up yet and are not in the financial statements. The total amount, including VAT, is €997 million. The sum of €260 million has already been incurred on the balance sheet. The two figures on the balance sheet of €260 million and €997 million bring the contracts that have been signed to date to €1.257 billion. Is that correct?

Mr. David Gunning

That is correct.

Mr. Gunning said the total project cost is €1.433 billion between now and 2022 or 2023.

Mr. David Gunning

That is correct.

The difference between the two is €176 million.

Mr. David Gunning

That is correct.

At this stage, Mr. Gunning is saying the contract has been signed for 88% of the costs, namely, €1.433 billion?

Mr. David Gunning

That is correct.

Has the board entered into any new contractual arrangements that were not in place at the end of December last year?

Mr. David Gunning

Yes, we have. The amount committed to 31 November 2019 is an additional €18 million on top of that.

Mr. Gunning mentioned that additional procurement will be needed for equipment for the project. Can everything for the period from 1 January 2019 to the hand-over of the hospital be completed for €176 million to give the figure of €1.433 billion? We are not talking about inflation. Does Mr. Gunning have an estimate of what further costs will be incurred to complete the project? Does he follow me? It am trying to get the big picture.

Mr. David Gunning

I understand that. I would just like to underline the difference between capital commitments, which is the promise to pay under contracts, and what has already been paid.

Yes, I have said that.

Mr. David Gunning

I am just making sure. Some of these capital commitments, for example, the €997 million, will materialise right up to the end of the contract.

Of course. I am looking at the full length of the contract.

Mr. David Gunning

The amount remaining to be committed is about €155 million, if we take out the commitments we have made this year - equipping and the other things the Chairman mentioned.

Does that €155 million cover everything the board will expect up to the end of 2023?

Mr. David Gunning

Yes, it is within the scope of the budget and all the items we have identified. As the Chairman correctly said, it does not include reserves and various other items.

We dealt with those issues in our periodic report so we understand that. We had a brief discussion on that. The board is operating on a very tight amount. A total of 88% of the costs of completion to 2023 has already been committed. That leaves very little. Is Mr. Gunning satisfied that the small amount of €155 million will see out the remaining life of the project?

Mr. David Gunning

We are. It is back to the payments-----

We know that tenders are subject to inflation and other elements such as new design and whatever else.

Mr. Fred Barry

If the contractor in the claims process can establish that there is work that we, on the State side, thought was included in the GMP of the contract but was not, that would be an exposure.

Mr. Barry is a very experienced man. What would be the industry norm for claims submitted by experienced contractors versus what they end up getting? Would they normally end up getting 60% or 70% of the claim?

Mr. Fred Barry

No, they would not. There is not a single norm. Some contractors put in extremely high claims and they come down an awful lot. Some put in more measured, considered ones and they still come down. One cannot really benchmark claims on the basis of the amount claimed and say that, therefore, there would be so much to pay. However, one can say that, over the life of a construction project, it would be most unusual if a contractor could not find some things that were additional to the original.

I will direct some questions to Mr. Breslin. I am still on the same topic but I want some information from him. There was talk about the HSE's capital plan and whether it would impact on other projects. I do not have the figures in front of me so I will be guided by Mr. Breslin's figures. What are the global figures for the HSE capital plan for the years 2019, 2020 and 2021?

Mr. Jim Breslin

Over the three years?

No, per annum. They were quite late coming out. What is the approximate global figure per annum?

Mr. Jim Breslin

It is about €650 million, growing to approximately €750 million.

This year, it is about €650 million and next year, it will be approximately €700 million.

Mr. Jim Breslin

I have a note saying it is about €744 million for next year.

What will it be in 2021?

Mr. Jim Breslin

We have not broken that out yet. I have a total for the entire health service, including for the Department's ICT, of €880 million. That is an increase of €35 million on the previous year.

What is €880 million?

Mr. Jim Breslin

The figures I gave earlier were for construction. We also have an ICT programme. Our total figure is going up by approximately €35 million.

Could Mr. Breslin give me the total amount for the capital plan?

Mr. Jim Breslin

What I was going to do was just add the increase of €35 million, which will predominantly go to construction. That would bring the figure up to about €770 million or €780 million.

Mr. Breslin is adding figures up in his head and I am not with him. To come back to the figures for 2019, 2020 and 2021, what is the total in the capital plan?

Mr. Jim Breslin

It is €642 million in 2019 for HSE construction. It is €744 million in 2020. We do not have a published figure for 2021 but I estimate that it will be in the range of €775 million.

The figure for this year is €642 million. What was the Department's payment to the National Paediatric Hospital Development Board this year? The Oireachtas grant was €128 million.

Mr. Jim Breslin

For which year?

For 2018. What has the Department allocated to the NPHDB for construction for this year?

Mr. Jim Breslin

It was €200 million.

It is obviously more than last year. The amount is cranking up and I can understand that.

Page 26 refers to total capital commitments in the future. The money for 2018 has been paid. Mr. Gunning stated the board's balance sheet at the end of December last year showed contracted capital commitments to be paid within one year, which means in 2019, of €265 million. They are not in the financial statements because they have not occurred yet. Am I reading that right?

Mr. David Gunning

Yes.

Based on how the board is phasing the works, Mr. Gunning is saying that in 2019 when he finished the audited accounts, which were only signed off a few weeks ago, contracts had been entered into that he expected to be paid in 2019 of €265 million. Is that a correct reading of the position? It might not turn out exactly that way.

Mr. David Gunning

Yes.

I am taking the figures from the audited financial statement.

Mr. David Gunning

I understand.

There might be a slight difference.

Mr. David Gunning

The point is these were the figures as of 31 December 2018. These figures would not have been updated, as the Chairman might have suggested-----

Mr. David Gunning

-----when the audit was signed off in October.

It was a couple of weeks ago. Fine.

Mr. David Gunning

This was the position as of 31 December 2018.

Starting into 2019, it was expected that €265 million would be paid in respect of contracts entered into-----

Mr. David Gunning

Correct.

-----as part of the project. That money would come from the board. Is that correct?

Mr. Jim Farragher

It would be via the HSE.

Okay. We are agreed. It would be something close to €265 million. I now move to the period "between one and two years". This refers to figures for after the end of 2019 but before the end of 2020. The accounts were finished at the end of 2018. Year one would have been 2019. Is that correct?

Mr. David Gunning

Correct.

The period between one and two years would be 2020. That is what the document indicates. Is that correct?

Mr. David Gunning

This includes 2020 and 2021.

That is not what the document indicates.

Mr. David Gunning

That is what is in it.

This is meant to be "between one and two years".

Mr. David Gunning

I am just telling the Chairman exactly what numbers are there.

Fine. The witnesses can see why the figure is alarming me. The published audited accounts indicate, in layman's language, that these payments are to be made in 2020 but Mr. Gunning is now telling me this should be 2020 and 2021. It should cover between one and three years.

Mr. David Gunning

Correct.

We are taking the figure as wrong. It is between one and two years. Mr. Gunning is saying it is between one and three years.

Mr. David Gunning

It refers to payments after year one and at the end of year two. The numbers in it-----

I am coming to that. We have covered year one.

Mr. David Gunning

Correct.

The next line refers to payments between year one and year two.

Mr. Jim Farragher

It is two years. It is not singular. It is "between one and two years". The first year refers to payments of €265 million, which we have just discussed. There is then a reference to "between one and two years"-----

That is after year one.

Mr. Jim Farragher

Correct.

That is not stated.

Mr. Jim Farragher

Yes. It is very simplified.

The reference is to the two years after year one.

Mr. Jim Farragher

Correct.

Mr. David Gunning

Correct.

Mr. Jim Farragher

It is 2020 and 2021.

It does not state that. I am putting it on the record that the accounts do not indicate that. We will stick with that. The witnesses are stating that in 2020 and 2021, the national children's hospital will require €653 million from the capital budget. We are dead right on that. Mr. Devine is nodding so my figures are dead right. A sum of almost €654 million will have to be paid in respect of the children's hospital in the years 2020 and 2021. It is what the document states.

Mr. David Gunning

It states it was the position as of end of the December.

Fine. Mr. Breslin has told me the total capital construction budget for the HSE is €744 million for 2020 and €775 million for 2021.

Mr. Jim Breslin

Without wishing to complicate the Chairman's life, I have an additional comment. We will do a capital carryover from this year to next year of €30 million, which will be added to the €744 million.

It appears that meeting the commitments for work already contracted and under way means the board will have to come up with €654 million between 2020 and 2021. It is stated in the accounts when that is expected to be paid. That is from a total capital construction budget of approximately €1.5 billion.

Mr. Jim Breslin

Yes.

I want those figures on record. What percentage is that?

Mr. Fred Barry

It is approximately 40%.

In that case, 40% of the capital budget for 2020 and 2021 will go straight to the children's hospital. I want to put that on the public record. It is what the figures indicate. The job of the Committee of Public Accounts is to look at these annual accounts and that is the implication of the figures. It is for another forum to say the children's hospital would not have an impact on the capital budget for any other project. We are putting it on record that it is taking 40% of the entire budget.

Mr. Jim Breslin

That has been our planning on this project for some time. It will be the big signature project of the health capital programme.

We know it is the biggest single project. It is why we would like to see accounts early in the year.

With respect, does the Chairman have any suggestion as to what capital budget it should come from? Where would he expect it to come from if not from health?

I am not suggesting anything. I am just putting the fact on the table that it is 40% of the capital budget. I am not suggesting anything. The Deputy can see the way the figures were presented and they did not tally when I first read them. It read as if those payments would come from next year's budget. The witnesses have said it refers to the two years after year one, which I accept. I am just putting the facts out there. I am not suggesting the funding will come from anywhere else.

The capital commitments of €997 million already incurred as per the note and the €260 million included in the previous year's accounts bring a total of approximately €1.25 billion. I do not expect the witnesses to have a breakdown now but can they provide it for the €1.257 billion, including contractual commitments entered into?

Mr. Fred Barry

Yes.

Do the witnesses understand what I am seeking?

Mr. David Gunning

We have a table.

If it is not a big table, it can be read into the record. I am happy for it come in writing.

Mr. David Gunning

We will provide it.

It might be neater. Things can get lost when they are read out loud.

Mr. David Gunning

Of course.

There is approximately €1.257 billion committed to date and the witnesses will send a detailed breakdown of it.

Mr. David Gunning

It will cover what makes up that figure. That is fine.

The job of the Committee of Public Accounts is to get to the bottom of the financial statements.

Mr. David Gunning

Absolutely.

It was one of the main issues I wanted to raise. This concerns capital commitments and the project moving on for the next few years. The breakdown of phase A is to be provided, although the witnesses have said it was part of the main contract at the end of the day. I will have to go to the chairman of the children's hospital project programme board for the next answer. Mr. Barry is only handling the €1.433 billion. Am I correct in saying that?

Mr. Fred Barry

Yes.

He said that is the budget agreed and it is hoped to come in on budget, subject to what we have discussed. I will not rehash that. It will be subject to assumptions. There is a clear implication that there are other costs associated with the children's hospital not in the construction contract. Will Mr. Breslin start telling us what else will be in there to get this children's hospital up and running? Children's Health Ireland will have significant costs and other costs may not be met directly by that organisation. What will be the costs of getting the hospital open? He is chairman of the project programme board, which comprises two people from the Department and two from the HSE. The members of the programme board are the people with the global picture of how this hospital will work.

We will start with the figure of €1.433 billion, which is fine. Let us hope it is as close to that as possible. Mr. Barry referred to issues in his opening statement that are not in that guaranteed maximum price. What are those elements not included in what we have been talking about today?

Mr. Jim Breslin

There are probably two categories. There is what has been discussed in the meeting around residual risks relating to the paediatric hospital development board's costs and there are some costs outside the paediatric hospital development board. I can go into either of those if the Chairman so wishes.

The residual risks are a challenge to the development board at bringing this in at €1.433 billion. We have spoken about inflation and so on. The Government has clearly stated the budget is €1.433 billion. Outside this are elements not in the budget for the construction of the hospital. These lie primarily with Children's Health Ireland, and they include ICT, the electronic health record and integration of services. They all form into the total figure seen before of €1.7 billion.

Okay. The €1.433 billion figure has been subject to quite a bit of interrogation. Mr. Barry is smiling as I say that.

The other costs have not been subject to any interrogation here at all. Today, we have dealt with the €1.7 billion. In meeting members of the board, we have only focused on the bare costs. This committee has never had a discussion on the €293 million in other costs. What information can Mr. Breslin give us on that? We have not really had any discussion on those extra costs.

Mr. Jim Breslin

One of the biggest items is the electronic health record. That will go through a peer review process under the office of the chief information officer. The procurement process and the project have already been looked at. We would hope to go to tender shortly and, on receipt of the tenders, CHI will contract with a provider to deliver an electronic health record. The budget that is provided for this has been looked at on a number of occasions, most recently in the request to the peer review process for permission to go to tender, and it seems to be within the norms that might be expected for a project of this nature.

Who makes up the peer review group?

Mr. Jim Breslin

They are independent people who are not part of the delivery process. They are nominated by the chief information officer for the Government. They invigilate this to ensure that we have proper costing, a proper programme and proper governance in place.

Ms Hardiman stated that the records of 1.2 million children would be on the system.

Ms Eilísh Hardiman

I want to be absolutely crystal clear. What we have at the moment is a patient administration system. That is a basic foundation system with the patients' data and information on it. What we are going out to procure is an electronic healthcare record. That is a different system that has all of the clinical notes. It also has all of the medications. It can combine their X-rays and all of their lab feedback. It also allows the clinicians to order electronically their diagnosis of the investigations. It is a very different system.

As the Secretary General outlined, we have developed a business case. So it has been through the HSE. As with any major ICT project in health, the Department of Public Expenditure and Reform has a peer review process. We have been before this peer review independent group three times this year. It interrogates the business case, the costs, independent of the Department or the HSE and reports back up to the Department of Public Expenditure and Reform. We have been through those three meetings. The final one was only last week and we hope to get a positive indication to go out to procure after that.

I ask Ms Hardiman to send us a detailed briefing on that, rather than taking up the time of the meeting at this hour in the afternoon. It is the one issue that we have not discussed as a committee, other than those quick figures we got the last time. Representatives from the HSE will appear before the committee in a few minutes.

Will the electronic health record contain any genetic data relating to children? I ask this because of how powerful that the genetic data of a population would be to a corporate entity. Do we have sufficient protections for our genetic data?

Ms Eilísh Hardiman

Electronic healthcare records do not tend to hold genetic data - all of the ones that are out there. There tends to be a separate system that holds the genetic data electronically.

Either Mr. Barry or Mr. Gunning stated that there might be claims in addition to the €1.433 billion for items they thought were not included. Have they had a meeting on what these might be? I am thinking that it might relate to ground works or whatever. This would lead to an argument between the quantity surveyors on both sides. Has the NPHDB looked into what these potential big claims might be that they might not have considered?

Mr. Fred Barry

Yes. We are reviewing them all the time and we are reviewing the responses being prepared by the design teams or the quality surveyors and inputting into all of that. It is in respect of these that we have had most of the disputes with the contractor during past year and, indeed, they will continue into next year and beyond. It is for these that the total additional cost to date has been certified at well under the €1 million.

We have discussed that. Mr. Barry believes it is 50% of the claims.

Mr. Fred Barry

Of those that have been determined.

Mr. Barry also said it was of those that had been submitted.

Mr. Fred Barry

Of the ones submitted.

Mr. Fred Barry

Just so that there is no doubt on the record, when the ER determines the claim, the contractor still has the facility to take further action against them up to the High Court, but we are not in the High Court on anything yet, I am pleased to say.

Good. I thank Mr. Barry.

While it may be rumour, is there any truth to the suggestion that the ducting for cabling, toilet piping, etc., is too small? I only heard recently that it is not wide enough to carry all the necessary facilities going through these corridors, ducts, ducting or whatever one wants to call them to carry the electric cables, toilet pipes and all that. I have heard that the ducts are not wide or big enough to take them and that is causing a problem. My second question is about rumours relating to steel beams. I do not actually know what kind of beams were involved. When they were brought in from abroad, they were too big to fit and had to be cut or adapted to fit. This resulted in a major cost. Is there any truth to these rumours?

Mr. Phelim Devine

We are not aware of any corridors not being large enough to cater for the designed M and E services as set out in the GMP. Just to say on that, we have brought the design of this building to a very high level in terms of building information modelling. We have a 3D representation of every single service in the building. That was done for GMP. We are very confident that all of the services fitted within the corridors. I can also confirm that I am not aware of any claim that has come in to say that the services are not fitting in the corridors. I am not aware of any steelwork that came in that had to be cut or altered. If such a thing should happen, it would be the contractor's responsibility and not that of the employer.

I am asking because there was a bit of ruction here last week regarding a printer that was bought and did not fit. I was told that the same thing could have happened in the building of the children's hospital. I am just clarifying if this happened.

Who makes up the design team for the building? Are they Irish or are they foreign?

Mr. Phelim Devine

We have a mixture. The lead architect is BDP, which is a UK firm. Its partner is an Irish firm, O'Connell Mahon Architects. The quantity surveyor is Linesight, which is an indigenous Irish firm, but it is also global. The M and E design engineer is Arup, which is again a global firm but it has been established in Ireland since 1946 with about 500 people. It is an Irish firm, one could say. O'Connor Sutton Cronin is the civil and structural engineer, and that is an indigenous Irish firm.

If there were an issue such as I described, who would carry the can? Would it be BAM, the contractors or the design team that would incur the costs if something in the design were wrong? Who would have responsibility and who would carry the costs if something like fittings were wrong?

Mr. Phelim Devine

Let us take the steelwork. If the steelwork came to site and it was the wrong length or something of that nature, that would generally be the contractor's responsibility.

That would be BAM in this case.

Mr. Fred Barry

Or its subcontractor.

If there was anything wrong with the design of the building, who would take responsibility?

Mr. Phelim Devine

If the design of the steelwork were incorrect and it had to be changed, that would be an employer responsibility through the design team.

The taxpayer would not be caught for any of those costs.

Mr. Phelim Devine

If the design of the steel beam were incorrect and it was a design team mistake, the taxpayer would be responsible, the employer would be.

That is why I am asking. It could fall back on the taxpayer again.

We will conclude this session because some of the HSE people are waiting outside. I know we ran a bit longer, but it was an issue people wanted to talk about. I thank our guests from NPHDB, the Department of Health, the HSE, and CHI for their attendance. Further information is to come through.

The witnesses withdrew.
Sitting suspended at 3.20 p.m. and resumed at 3.29 p.m.