People are genuinely shocked at the extraordinary cost increase in the national children's hospital, which is up by about 126% in four years, a remarkable increase taking into account annual construction inflation costs. People are also very concerned at the prospect of further increases in the cost of the hospital because, of course, the contractors will be able to recoup future costs where the inflation rate exceeds 4% per annum. I believe construction inflation is currently running at up to 10.5%. It is a far cry from the €650 million all-in that the Taoiseach announced, I think, back in 2016.
We learned late last week that the Minister was briefed on 27 August. In a comprehensive note from his assistant secretary he was told the "construction budget is trending very significantly over budget." I am told that at a minimum it is to be an additional €191 million and this was not in dispute. The note also stated that BAM had submitted a further €200 million over the €191 million. This did not include VAT, sectoral employment orders and so on. The note concluded that the CEO would advise the Department in the following week.
What did the Minister do when he got that note? Did he talk to the Secretary General in the Department about this? Was it raised at the regular management meeting of the Department? Did he seek further briefings? Why did he not alert his Government colleague, the Minister for Finance, Deputy Donohoe? We have not had an explanation for this enormous overrun with a significant impact on the capital budget. Why did the Minister for Health not fully inform the Dáil? In fact the Dáil was misled essentially with the €983 million figure. No mention was made of the €191 million or that the costs were trending significantly over budget, of which the Minister would have been apprised in that note in August.
Are we to seriously believe that the Secretaries General at the Departments of Finance and Health had no discussions about this between August and November of last year or that the two Ministers did not? If that is the case, it raises fundamental issues about the governance, competence and management of the budgetary process. Was it that this project was too big to fail? Politically the Government had invested too much and it was too late to stop or to relocate. There was an extraordinary silence about this over a long period of time. Does the Taoiseach understand why people find the explanations we have been offered so far incredible? Does he accept that the overall costs will be higher than the €1.7 billion because of inflation and the obligations the Government has?
Does the Taoiseach accept that the Minister for Health should have alerted the Minister for Finance to this issue as far back as August and that his officials should have alerted the Department of Public Expenditure and Reform?