Three-quarters of children’s hospital construction budget is spent as costs top €1bn

Three-quarters of the construction budget for the new national children’s hospital (NCH) has now been spent with almost a year and a half to go before building work is due to be finished.

Costs have now topped €1 billion out of the €1.433 billion approved for the construction phase of the project according to figures provided to the Dáil’s public spending watchdog.

The NCH has been beset with delays — some due to the Covid-19 pandemic.

There have also been disputes between National Paediatric Hospital Development Board (NPHDB) and the main contractor BAM which has made claims for additional costs running into hundreds of millions of euro.

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The original estimated cost of the project was put at €800 million in 2014 before being set by the then Fine Gael-led minority Government at €1.433 billion in 2018.

This funding was to cover the main hospital at the St James’s Hospital site and two satellite centres in Blanchardstown and Tallaght.

Another €300 million is expected to be spent on the integration and transfer of services from the existing three children’s hospitals in Dublin including information technology and commissioning costs bringing the total expenditure to €1.73 billion.

However, there are fears that the pandemic delays, inflation and other factors like Brexit impacting on the supply of goods and services will increase construction costs and opposition politicians have long suggested that the total spend on delivering the NCH could exceed €2 billion.

A note to the PAC accompanying a letter from Department of Health secretary general Robert Watt says that a definitive update on the costs cannot be provided.

It says this is “due to the fact that we are talking about a live contract and speculation on any costs will be detrimental to the Development Board’s commercial engagements.”

PAC chairman, Sinn Féin TD Brian Stanley, commented on the spending saying: “We’re already into a situation where it exceeds what the original estimates were for the cost of it and we’re still somewhat away from opening the doors”.

He said there’s “potentially nearly three years to go on this project.”

The PAC was told earlier this year that construction of the hospital at the St James’s Hospital site is expected to be substantially complete by the end of January 2024.

However, with a number of months of fitting out to be completed after that date questions were raised at a PAC meeting in June as to whether it could be 2025 when the NCH finally opens.

The Department of Health note says the capital budget of €1.433 billion has not yet been depleted and to date €1,049,001,707 has been spent as of July.

This is 73.2 per cent of the allocated budget.

The note says: “Brexit, the pandemic and recent geopolitical developments have severely impacted construction industry supply chains and more general economic challenges — the NCH project is not immune to these external challenges.”

It adds: “Every effort is being taken to mitigate the risks but these externalities beyond the control of the contractor and the NPHDB make speculation and more definitive forecasting unwise.”