Final cost of National Children’s Hospital to exceed €1.43bn, development board says

The national children’s hospital (NCH) will not open to patients until the end of 2024 at the earliest, with the final bill set to exceed the construction budget of €1.43 billion, politicians have been told.

The contractors building the hospital have told the development board that the project will reach “substantial completion” by the end of March 2024, with more than €1.1 billion having been spent to date.

However, there will then be a period of “at least six months” after the hospital is handed over to Children’s Health Ireland (CHI) for commissioning, meaning children will not be treated on the premises until a “potential earliest” of the end of 2024.

During an appearance before the Oireachtas health committee on Wednesday, National Paediatric Hospital Development Board (NPHDB) chief officer David Gunning said there had been “significant” progress on the construction of the hospital over the past year.

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“There are, however, a number of factors which continue to put pressure on this forecasted timeframe, and we will continue to work with the contractor to understand what implications these factors may have on the programme,” he said. “As a result, the contractor’s programme is under constant review and evaluation. Delays have an implication on the cost of the project.”

Derek Tierney, assistant secretary of the health infrastructure division at the Department of Health, said the construction component of the project was 78 per cent complete. The NCH has already been beset with delays and cost inflation, which the NPHDB has attributed to issues including the Covid-19 pandemic, Brexit and the war in Ukraine.

“These issues have led to production disruption, import delays and constraints, inventory depletion resulting in shortages in the market and, more recently, escalating energy and transport costs,” Mr Gunning said. “These are global challenges and are not unique to the construction sector but are having – and will continue to have impacts on the project.”

Mr Gunning said expenditure on the project up until the end of August had exceeded €1.13 billion. In 2018, the then government approved capital investment of €1.433 billion for the project.

He declined to answer questions on what the final cost is expected to be, stating that it is a live contract and speculation on costs would be “detrimental to the NPHDB’s commercial engagements and ability to negotiate on behalf of the State”. However, he said the budget of €1.43 billion “will be exceeded”.

“As we look at the programme, the 17 months extension, the additional costs will bring us beyond that. There is going to be additional costs and that will land when they land,” he added.

There have also been disputes between NPHDB and the main contractor BAM, which has made claims for additional costs running to hundreds of millions. More than 1,100 claims were made, of which 989 are still outstanding and at various stages of the process.

A “moratorium” on dealing with claims has been in place since the summer of last year, in order to allow teams on both side to “focus on the important work of getting the hospital done”, Mr Gunning said.