Three-quarters of the construction budget for the new National Children’s Hospital (NCH) has now been spent with nearly a year and a half before construction is completed.
Costs have now exceeded €1 billion of the €1.433 billion approved for the project’s construction phase, according to figures submitted to Dale’s Public Expenditure Control.
NCH has experienced delays – some due to the Covid-19 pandemic.
There have also been disagreements between the National Children’s Hospital Development Board (NPHDB) and main contractor BAM, which has made claims for additional costs amounting to hundreds of millions of euros.
The original estimated cost of the project was set at €800 million in 2014 before the minority government led by Fine Gael set it at €1.433 billion in 2018.
This funding was to cover the main hospital on the site of St James’s Hospital and two satellite centers in Blanchardstown and Tallaght.
A further 300 million euros is expected to be spent on the integration and transfer of services from the three existing children’s hospitals in Dublin, including information technology and operating costs, bringing the total spending to 1.73 billion euros.
However, there are concerns that pandemic delays, inflation and other factors such as the impact of Brexit on the supply of goods and services will increase construction costs, and opposition politicians have long suggested that total spending on NCH delivery could exceed €2 billion.
A note to the PAC attached to a letter from Department of Health Secretary-General Robert Watt says that no final cost update can be provided.
She says this is due to the fact that we are talking about a direct contract and that speculating on any costs would be detrimental to the development board’s business engagements.
PAC President Sinn Féin TD Brian Stanley commented on the spending: “We are already in a position where it is exceeding its original cost estimates and we are still somewhat far from opening the doors.”
“It will probably be about three years on this project,” he said.
PAC was told earlier this year that hospital construction on the St James Hospital site was expected to be largely completed by the end of January 2024.
However, with a number of months of preparation to be completed after that date, questions were raised at the PAC meeting in June about whether it could be 2025 when the NCH finally opens.
The note from the Ministry of Health says that the capital budget of 1.433 billion euros has not been exhausted yet, and so far, 1,049.001,707 euros have been spent as of July.
This represents 73.2 per cent of the allocated budget.
The memo reads: “Brexit, the pandemic and recent geopolitical developments have severely impacted the construction industry’s supply chains and general economic challenges – the NCH project is not immune to these external challenges.”
He adds, “Every effort is made to mitigate risks but these external factors beyond the control of the Contractor and the NPHDB make speculation and more accurate prediction unwise.”