Wednesday, 13 March 2019

Questions (207)

Danny Healy-Rae

Question:

207. Deputy Danny Healy-Rae asked the Minister for Health the way in which the projected overrun in the cost of the new children's hospital occurred; and if he will make a statement on the matter. [12603/19]

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Written answers (Question to Health)

Under its Establishment Order, the National Paediatric Hospital Development Board (NPHDB) has statutory responsibility for planning, designing, building and equipping the new children's hospital and outpatient and urgent care centres in accordance with a brief approved by the HSE with the prior consent of the Minister for Health, and subject to any subsequent variations to this brief as may be determined by the Executive in consultation with the Board, and with the prior consent of the Minister.

The size, complexity and specialist nature of this project informed the decision by the NPHDB to adopt a two-stage procurement process as follows:

- Procurement stage 1: a full tender and contract for Phase A on the basis of a detailed design, with the tendering of Phase B on a preliminary 1st stage design with an approximate and remeasurable bill of quantities reflecting the preliminary 1st stage design; and

- Procurement stage 2: While the basement Phase A works were under construction, the 2nd stage detailed design for the above ground Phase B works was completed. This was done on a remeasurable basis with a full bill of quantities priced at the 1st stage preliminary design tendered rates.

Tender bids were received by the NPHDB at the end of October 2016. In February 2017 the NPHDB submitted the Final Project Brief to the HSE for review seeking the Minister for Health’s consent and HSE approval in line with the approval process set out in the Board’s Establishment Order. In April 2017, I brought a Memorandum to Government advising of the outcome of the tender process undertaken by the NPHDB with associated capital costs of €983m of which €916m was to be met by the Exchequer, and seeking approval for the construction investment decision, following which the HSE approved the Project Brief with my prior consent.

In November 2018, following completion of the second stage of the two-stage tender procurement process, the NPHDB advised that the final cost of the design, build and equipment programme for which the NPHDB is responsible was €1,433 million, €450m more than advised to Government in April 2017. In December 2018 I brought a further Memorandum to Government of the revised costs and Government approved the construction investment to allow Phase B of the hospital to be instructed.

As the Deputy will be aware, an independent review of the escalation in cost in relation to the new children's hospital is underway. Its terms of reference have been published. Inter alia, the review will establish the sequence of events in relation to the cost increases experienced by the project.