Mr. David Gunning:

I thank the Cathaoirleach for his invitation and welcome. I thank the committee for inviting the National Paediatric Hospital Development Board, NPHDB, today via video link to provide an update on the construction progress on the new children’s hospital. I am the chief officer at the NPHDB and I am joined this morning by Mr. Phelim Devine, project director; Dr. Emma Curtis, medical director; and Mr. Jim Farragher, finance manager.

The National Paediatric Hospital Development Board was appointed in 2013 to design, build and equip the new children’s hospital on the campus shared with St. James’s Hospital in Dublin 8, and two paediatric outpatient and urgent care centres Children's Health Ireland, CHI, at Connolly, Blanchardstown, and Children's Health Ireland, CHI, at Tallaght. The national children's hospital project, NCH, a government priority, will have a significant impact on the healthcare outcomes of 25% of the population once completed and is the most significant single capital investment project in the healthcare system ever undertaken in Ireland. It will bring together the services currently provided at the three children’s hospitals into one modern, custom-designed, digital hospital where staff will deliver the best care and treatments to Ireland’s sickest children and young people.

The NPHDB’s 2019 accounts were audited and approved by the Comptroller and Auditor General on 17 June 2020. The expenditure as of 31 December 2019 for that year on the design and build of the hospital was €199,622,610. The NPHDB’s 2020 accounts are currently being audited by the Comptroller and Auditor General and will be finalised shortly. We have provided in the statement a brief table showing the 2019, 2020 and cumulative to the end of 2020 expenditure.

I will now turn to the construction update. The new paediatric outpatient and urgent care centre, CHI at Connolly was opened in July 2019 and is already fully operational. On the CHO Tallaght update, it is a priority for the NPHDB and indeed all stakeholders to open the paediatric outpatient and urgent care centre at Tallaght in 2021 and we are pleased to report that we are on target to do that. Members will see from the images distributed as part of the briefing pack that construction work on the 4,600 m2 centre is nearing an end with a substantial completion date scheduled for September 2021. It will then be handed over to Children’s Health Ireland to open for services after an eight-week period of operational commissioning and equipping. The works at Tallaght are nearing completion.

Final internal works comprise painting, commissioning, cleaning and snagging. External works comprise final pavements and landscaping. The work on the OPD centre at Tallaght included a significant investment in the adult hospital which involved the delivery of a new changing and administration block, a new creche and the upgrade of roads, pavements, car park and electrical infrastructure.

Progress on the main new children’s hospital is also continuing at pace. The primary concrete frame was completed in March 2021. The infill concrete slabs over the steelwork frame closing in the concourse will be completed by August 2021, as will the unitised glazing to the ward block at levels 4 to 6. The façade will be complete by the end of 2021, with the glazed biome that links the building to be completed by the end of the first quarter of next year. The fit-out of the south finger rooms, comprising outpatients, cardiology and therapies, and the hot block rooms, comprising emergency department, imaging, critical care and theatres, are progressing well. The remainder of the fit-out of the north finger rooms, comprising outpatients, the hospital school, third level education, parent overnight accommodation, pharmacy and the ward block rooms, will commence in the next month. The primary mechanical and electrical plant, comprising boilers, combined heat and power plant, generators, transformers, main distribution boards and medical gases, are well progressed, with the focus now on primary and secondary distribution around the site.

On equipping, some of the group 1 medical equipment, such as theatre and critical care pendants, are currently being installed. The group 2 equipment, comprising automated guided vehicles and clinical decontamination unit equipment, is in procurement. The balance of the group 2 equipment, such as MRIs, CTs and other advanced diagnostic equipment, will commence procurement in the next quarter.

Sustainability is embedded in the design of the new children’s hospital. The hospital very recently received a BREEAM excellent rating in design and is one of only a small number of hospitals in the world to have achieved such a rating. BREEAM is the world’s leading sustainability assessment method for major projects.

On the topic of wider construction sector challenges, the global pandemic, Covid-19, has disrupted the construction sector and all its supply chains both nationally and internationally. The NCH project has not been immune to this. In 2020, both the construction of the new children’s hospital and the Tallaght outpatients and urgent care centre were closed for a period following the arrival of Covid in Ireland. In 2021, the sites remained open during the level 5 lockdown. The contractor introduced extensive health and safety measures, which include weekly screening and PCR testing for all workers, and more than 5,000 tests were conducted during the month of June.

It is acknowledged by all stakeholders that Covid and Brexit will likely place pressure on the availability of essential supplies in the market globally. The construction sector is facing challenges related to the supply of market essentials as a result of increased global demand and shortages driven by Covid-related factory shutdowns, production disruption and inventory depletion. In addition, it is reported that there are Brexit-related import delays and constraints. This is a global challenge, one that is not unique to the construction sector, but one that will have potential impacts on the project, with cost and lead time uncertainty. The contractor continues to work through these challenges and will manage the risks.

With regard to the timeline, as outlined to this committee in December 2020, there are delays to the programme of works. We have previously reported to the committee that we did not have a compliant programme from the contractor. I am delighted to be able to report to the committee that a compliant programme was submitted by the contractor in March 2021 and has been determined by the employer’s representative, ER. This, in itself, is a major milestone for the project. With over 40,000 separate activities to be completed over the course of the build, the programme details each and every one, ensuring that it is in the right sequence and at the right phase of the build. By determining the programme as compliant, the ER has essentially confirmed that it is feasible to complete the construction phase within the timeframe set out. This is only feasible if the project is executed and resourced efficiently by the contractor and its subcontractors, and if all other external factors, including Brexit and Covid, do not impact on supply issues and goods and services. The compliant programme takes account of the known delays, and all stakeholders are fully aligned around the goal of opening the hospital in 2024. The NPHDB and the main contractor are engaged in a series of workshops to map out the detail within the programme to take account of the risks that remain and to make every effort to ensure that the target date can be achieved.

As part of the combined effort to achieve delivery of the programme within the shortest timeframe possible, all dispute mechanisms have been paused for a period of time. This moratorium has been agreed, which enables the parties to focus all their efforts on ensuring that the new target completion date can be realised. This does not remove the risk of claims, nor does it mean that we will not continue to receive claims. Claims will continue to be determined by the employer’s representative as set out in the contract. We have provided an information document as an appendix to this document setting out the current position with contractor claims on the NCH and on Tallaght.

With regard to cost, the Government approved an investment decision of €1.433 billion for the project. This investment decision excludes items where there was no price certainty, nor can there be certainty for the duration of the project. These include construction inflation, statutory changes, any change in scope resulting from healthcare policy changes and also the sectoral employment order. While we now have a compliant programme, the target completion date for the programme is 14 months later than that set out within the contract. Any elongation of the programme will lead to additional cost. There are potential cost implications in regard to Covid-related delays, costs associated with additional health and safety measures, as well as ongoing claims that have the potential to contribute to the overall costs. These matters, as well as those associated with any change to the programme duration, are currently subject to commercial mechanisms and are part of the live contract that exists between the NPHDB and BAM, the main contractor. Therefore, I am not in a position to elaborate further at this time as it could compromise our ability to negotiate on behalf of the State. There is an extremely high likelihood that any discussion on costs, however hypothetical, would prejudice enforcement of the existing contract and very likely negatively impact or jeopardise our current engagements with the contractor.

On project governance, the NPHDB reports to the children’s hospital project and programme, CHP&P, steering group on a monthly basis, providing comprehensive updates on risks to costs and programme, including all aspects of the project. We also report to the CHP&P board. We continue to work closely with officials in the Department of Health and the HSE, as well as with colleagues in Children’s Health Ireland.

In conclusion, the children’s hospital is taking shape and the outpatients centre at Tallaght is nearing completion. Significant progress has been made, as is evident from the photographs and video that we have provided. The project continues to have challenges. However, we are moving forward with a spirit of co-operation with the main contractor and with all of our stakeholders to ensure that this badly needed hospital is delivered as soon as possible. I look forward to answering any questions the committee members might have on the project.