Minister refuses to rule out hospital costs could breach €2 billion mark

The project has been hit with around 900 claims worth at around €540 million
Minister refuses to rule out hospital costs could breach €2 billion mark

By Cate McCurry, PA

Michael McGrath has refused to rule out that mounting costs to build the National Children’s Hospital could be in excess of €2 billion.

The Minister for Public Expenditure said the final cost of the project is some distance away.

The facility is under construction at St James’s Hospital in Dublin and has been beset by spiralling costs that have escalated to €1.4 billion.

The project has been hit with around 900 claims worth at aroud €540 million.

National Children’s Hospital Ireland
A woman walking past the construction site of the new National Children’s Hospital in Dublin (PA)

Mr McGrath said the National Paediatric Hospital Development Board (NPHDB), which oversees the project, is fighting the claims.

He said the hospital development board considers that the claims, made by the contractor BAM, are overinflated.

“The difficulties in that project are well documented, and it’s important to say that the state is enforcing the existing contract that we have in place,” Mr McGrath told the Joint Committee on Finance.

“The contractor BAM has lodged a very large number of cost increase in claims.

“But it should be noted that these are the value of claims made by the contractor and those have not been agreed or approved.

“They are considered by the hospital development board to be overinflated and include costs already part of other claims.”

 

Some 650 of these claims have been disputed and have been referred to the dispute management process under the contract.

Mr McGrath said the difficulties and delays that have arisen has been a “source of real frustration” within Government.

The Fianna Fáil minister told the committee that the estimated €1.4 billion is not a revised figure.

Sinn Féin Pearse Doherty said: “Minister, you’re the Minister for Public Expenditure, you’re the person that we empower as a state to ensure value for money in terms of this project.

“I’m asking you a very simple question, as Minister for Expenditure, are you confident that this project will not breach the two billion euro mark, which is in excess of half a billion more than what is the published figure.”

Budget 2022
Minister for Public Expenditure Michael McGrath (PA)

Mr McGrath said there is a significant cost increase in claims that are going through the system which he said will have to be worked out over a period of time.

“Any expression by me of a level of confidence or otherwise as to where the final ultimate figure will land in relation to this, is not a road that I can or should go down,” he added.

“It will be used by the contractor to leverage additional resources and in any event, there is no up-to-date overall estimate at this point in time.”

Mr Doherty was critical of the minister’s reluctance to provide further detail on the costs.

“The fact that you’re saying that you’re some distance away from actually finding the end figure, we’re talking about figures of billions, is appalling minister,” he added.

“It is shocking and damning that you, as minister and your department doesn’t have an estimate at this point in time of what the National Children’s Hospital will be.”

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