Mr. David Gunning:

If that is what the committee wants, I am more than happy to do that.

I thank the committee for inviting the National Paediatric Hospital Development Board, NPHDB, to provide an update on the progress being made on the development of the new children’s hospital, NCH, and to provide an update on expenditure issues and trends relating to the development. I am chief officer at the NPHDB. I am joined by Mr. Phelim Devine, project director, and Dr. Emma Curtis, medical director. The NPHDB was appointed by the Minister for Health in 2013 to design, build and equip the NCH on a campus shared with St. James’s Hospital in Dublin 8, a paediatric outpatient and urgent care centre at Connolly Hospital, and a paediatric outpatient and emergency care centre at Tallaght hospital. Both satellite centres were handed over to Children’s Health Ireland, CHI, in 2020 and 2022 respectively and are fully operational.

In December 2018, the Government approved an investment decision of €1.433 billion for the design, build and equipping of the NCH and the two outpatient and urgent and emergency care centres at Tallaght and Connolly hospitals. To date, just over €1.325 billion of the €1.433 billion has been expended. A number of contract provisions were not included as part of the capital approval. These included construction inflation in excess of 4%; any changes in scope resulting from healthcare policy changes; statutory changes; Covid-19; implementing PwC's recommendations; claims defence; and the sectoral employment order. Work on the NCH site is 89% complete as at the end of June 2023. This progress gives us an insight into this state-of-the-art hospital that, once complete, will be available to children, young people, their families, and staff. We can see the vision of a world-class facility being realised in some of the rooms.

I will provide a general overview of the progress being made on the NCH to date. We have provided an image presentation to accompany this progress update. I also thank members of the committee who have taken the time to visit the site. Despite the challenges, construction on the NCH has advanced significantly since we last updated the committee in 2022. The external scaffolding surrounding the NCH has been removed and the external façade, including glazing, is fully complete. The most advanced areas in the building have finished floors, walls, ceilings, doors, nurses’ stations and built-in medical equipment installed. The 380 individual inpatient rooms are taking shape with fit-out of fixtures, en suites, sliding doors, joinery and medical equipment progressing.

The school area of the new children’s hospital for pre- and post-primary and secondary education is also taking shape and now has floors and ceilings, and joinery has commenced. The third-level education centre that comprises lecture theatres, seminar rooms, collaboration spaces and a library for up 2,500 students is also well under way. The glass biome, which encapsulates the lifts and stairs that provide access to all areas, is almost complete. The specialist equipment that will be built into the hospital prior to substantial completion has been procured. Some is in manufacture and some is on site ready for inspection. This includes MRIs, CTs, X-rays, theatre imaging equipment, central decontamination unit, CDU, washers and sterilisers, etc. The remaining medical and non-medical equipment will be procured in 2023 for installation after substantial completion. The process of procuring a concessionaire for the car park is under way. A public tender is also in progress for the construction of the family accommodation unit.

I will address the challenges we face. It will not come as a surprise to members when I say we face a number of challenges before the hospital can open its doors to children. I will share some of those challenges with the committee. BAM has not issued a contract compliant programme. This is unacceptable. The most recent progress report received from BAM in April 2023, for works to February 2023, stated the substantial completion date would be May 2024, which is 21 months beyond the original contracted completion date of August 2022 and 18 months beyond the contractual substantial completion date of November 2022. Progress reports in March, April, May and June 2023 have not been provided by BAM. BAM had previously confirmed in writing that an updated programme would be submitted by 7 July 2023. We are still awaiting this programme.

While I understand how frustrating this is for members, it is very difficult to provide a firm answer on the completion date in the absence of a compliant contract programme. What this project needs more than anything is certainty on the programme, which, under the contract, BAM is required to provide. The NPHDB has applied all the levers available within the public works contract to get BAM to deliver on its obligations. The continued failure to deliver a compliant programme and progress reports means BAM is not meeting its contractual obligations. For this reason, the NPHDB has advised BAM that it has issued an employer claim to withhold 15% of the payments that are due to BAM for works completed. This measure will come into effect for payments due to BAM for work completed in April, May and June 2023.

On low productivity, there are issues around insufficient productive resources allocated to site and the resulting poor productivity of BAM in meeting its programme. In accordance with the contract, BAM is required to “proceed with the works regularly and diligently” and it is obliged to resource the project at a level that will deliver substantial completion of the hospital at the earliest possible date. BAM is not providing sufficient resources to deliver the hospital. This continued lack of resourcing together with poor project execution may lead to further slippage of the substantial completion date if this continues. To illustrate this point, BAM achieved 67% of its planned output in the past 12 months. This output level fell as low as 34% at certain times during this period. To further illustrate this point, BAM's current monthly billing should approximate to €15 million. However, in recent months, it is below €10 million.

What this looks like from an actual output perspective is illustrated by examining BAM's progress on room completions. Based on BAM’s commitments, 3,000 rooms should have been completed by now. To date, 27 rooms have been deemed complete. Furthermore, upon inspection, these 27 rooms presented a large number of snags. The NPHDB has worked closely with BAM and the design team to eliminate these issues. This has been a time-consuming exercise. BAM is expected, under the contract, to focus on completing rooms to the specification required as well as on completing all other activities for which it is responsible. The children of Ireland need this hospital as soon as possible.

The operating theatres in this hospital will be completed to the highest clinical standards. An independent report commissioned by CHI highlights potential issues relating to the position of four ventilation grilles in 11 of the 22 operating theatres.

This issue is currently being reviewed by two expert teams, and we await the output of their analysis and expert reviews.

This brings me to the topic of claims. We have provided a claims table in the members' meeting pack. BAM continues to submit large volumes of claims. In fact, 2,175 claims have been raised up to the end of June 2023. The substantiated value, as claimed by BAM, is €756 million. The employer's representative has determined 1,487 claims, at a value of approximately €14 million, which is less than 2% of the overall contract value.

I will now refer to costs. Based on the delay by BAM in delivering on the substantial completion date as per its contractual arrangements, the NPHDB has submitted a capital request to the HSE in line with our governance arrangements to ensure there is sufficient funds to bring the project to substantial completion. This request is being considered by our stakeholders and, as such, I am precluded from discussing the details of the figures. As we are constantly engaging with BAM, it may also be the case that to divulge detailed information on costs publicly at this time would be disadvantageous to the State's position. The biggest driver of additional costs is delay. As I have outlined, the project is beset with delays. Unless the behaviour of BAM changes, we may suffer further delays in the period ahead.

The NPHDB is fully committed to delivering the new children's hospital in as timely a manner as possible, giving the best possible value to the State and to a standard and of the quality that the children of Ireland deserve. It is our job to ensure the quality is the best possible and that it meets the stated specifications and works requirements.

We know from what it has stated that BAM does not want the children and young people of Ireland to have to wait for the hospital for longer than is necessary. I urge BAM to consider its behaviour and overall approach to delivering on this project. The kind of behaviour that has been experienced simply must not continue. We will continue to work with BAM to drive the activity at the site and push towards as rapid and cost-effective an opening as possible. We are fully aware that issues of cost and delay are frustrating in the extreme. We share that frustration, but we will prevail. The hospital will be a wonderful, welcoming environment for children, young people, their families, students, and the heroic staff who will work there.