Tuesday, 5 February 2019

Questions (83)

Stephen Donnelly

Question:

83. Deputy Stephen S. Donnelly asked the Minister for Health the schedule of all costs, subsequent changes to costs and current projected costs associated with the national children's hospital from initial tenders to date; the details of costs covered by the development board (details supplied) and the Children's hospital group and other associated costs; and if he will make a statement on the matter. [5394/19]

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Written answers (Question to Health)

Following evaluation by the National Paediatric Hospital Development Board (NPHDB) in early 2017 of main construction tenders and the selection of preferred contractors, the final cost of the design, build, and equipment programme for which the NPHDB is responsible was €983m. Following the completion of the second stage of the two-stage tender procurement process in November 2018, the capital project cost is now at €1,433m.

In addition to the capital project, there is a broader programme of activity associated with the integration and transfer of the services of the three children’s hospitals to the new sites under development. This includes a comprehensive Children’s Hospital Integration Programme which is well underway, funded through revenue, to ensure the successful clinical and operational merging of three paediatric hospitals; investment in ICT and the Electronic Health Record roll-out funding through the ICT capital programme; pre-2013 project expenditure relating to the former Mater project, and the planned construction of the Children’s Research and Innovation Centre to be funded through philanthropic funding. Costs relating to decommissioning of the three hospitals are not included. Neither have future uses for the hospital premises at Temple Street and Crumlin or potential revenues for the latter been determined. Adult services will be provided in Tallaght Hospital in the spaces vacated by the paediatric services.

The following table sets out the breakdown of costs from initial tenders and following the completion of the two-stage tender procurement process.

In relation to the reporting of the cost escalation, I was first advised by my officials in September 2017 of a costs estimate increase of €61m associated with additional sprinklers, post tender programme alignment and the cost of the OPD Urgent Care Centre at Tallaght with assurance that developments were being carefully managed. The NPHDB was advised to identify savings within its approved capital budget and seek to offset the potential cost increases through a variety of measures with a view to managing the project within approved parameters. It was the subject of detailed discussion and intensive monitoring.

I was briefed on a potential cost escalation for the project on 27 August 2018 following a meeting of my officials and the Chair and Executive Director of the NPHDB on 24 August 2018.

On completion of the Guaranteed Maximum Price process, the NPHDB informed my officials of the revised cost of €1.433bn on 8 November 2018, and I was subsequently briefed on 9 November on the emerging position.

On 9 November, the cost escalation was highlighted at a meeting with the Taoiseach. It was agreed that further details would be provided in a formal way to the Department of Public Expenditure and Reform and to the Department of the Taoiseach prior to Government consideration. Officials in the Department of the Taoiseach were briefed on 21 November and on 13 December, and the Taoiseach’s adviser was briefed on 26 November.

My Department submitted a report from the National Paediatric Hospital Development Board on the cost overrun and the reasons for it to the Department of Public Expenditure and Reform on the 19th November and met with officials of that Department to discuss it on the 23 November.

The draft Government Memo was shared with the Department of Public Expenditure and Reform and the Department of the Taoiseach in early December and was submitted to Cabinet for its meeting on 18 December 2018.

New Children's Hospital Construction and Non-construction Costs

- 2017 costs as per Government approval of €983m following receipt of tenders

- 2018 costs following completion of GMP process in November 2018

Item

2017 Costs

€m

2018 Costs

€m

Decant

16

14.5

Aspergillus

6.8

5.8

Main NCH

637

890

Less VE

-66

Net Main NCH Construction

571

890

Outpatient and Urgent Care Centres

38

53.4

Sub Total

631.8

963.7

VAT

85.3

130.1

Gross Construction Costs

717.1

1093.8

Equipping

71.6

87.9

Planning

14.9

13.6

Design Team fees

43.7

71.3

Risk/Contingency

39

51.3

NPH Project Costs

52

66.04

Other Costs Sub Total

221.1

290.1

VAT (excluding Construction)

44.7

49

Sub Total Gross Other Costs

265.9

339.1

Capital Build Sub Total

983

1.433bn

Children's Research and Innovation Centre

18

18

ICT

88

97

Children’s Hospital Integration Programme

86

86

Electronic Healthcare Record

52

52

Mater Campus

40

40

Sub Total

284

293

Grand Total

1.26bn

1.7bn