Mr. David Gunning:

I thank the committee for inviting the National Paediatric Hospital Development Board, NPHDB, today to present on our 2021 financial statements 2021.

The NPHDB’s 2021 accounts have been audited and approved by the Comptroller and Auditor General. The expenditure as at 31 December 2021 for that year on the design and build of the hospital was €302.82 million. I draw the committee’s attention to the table on the bottom of page 1, which sets out not only 2020 and 2021 audited financial statements but also includes 2022 and 2023 year-to-date to September 2023 unaudited financial information for the committee.

In December 2018, the Government approved an investment decision of €1.433 billion for the design, build and equipping of the new children’s hospital and the two outpatient and urgent care centres at Tallaght and Connolly hospitals. There are a number of contract provisions that were not included as part of the capital approval. These include construction inflation in excess of 4%, any changes in scope resulting from healthcare policy changes; statutory changes; Covid-19, implementing PwC recommendations, claims defence and the sectoral employment order.

These items have added cost to the project. To date, the total amount spent by the NPHDB up to 30 September 2023 is €1,361,703,344, including accruals and VAT. This leaves €71 million remaining in the current overall capital budget of €1.433 billion. Work on the hospital is 92% complete as of the end of September 2023.

I will move on to the issue of progress to date. I do not propose to read through the detailed bullets in the opening statement. I would like to say that the NPHDB is fully engaged with CHI on the operational commissioning phase of the hospital to ensure there is a seamless handover at substantial completion. The key work streams are equipping, technical commissioning and the hospital's ICT systems.

On the programme timeline, the building is well advanced but there is still some way to go to substantial completion. Typically, in a building of this size and scale, the last 10% is the slowest to complete because it incorporates all the finishes, system integration and commissioning to ensure the room finishes are to the highest clinical standards. The contract with BAM states that there was substantial completion in August 2022. Some additional time was awarded to BAM by the employer’s representative, which extended the contractual substantial completion date to November 2022. Clearly, this date has been missed. Over the course of the past two years, we have received a number of revised programmes from BAM, with changing substantial completion dates.

We said at the Joint Oireachtas Committee on Health in July 2023 that BAM had committed to delivering an updated programme. This programme was delivered in mid-July 2023. The NPHDB highlighted concerns with this programme and this resulted in BAM providing a new programme at the end of September 2023. This September programme is currently being evaluated by the employer’s representative. The stated substantial completion date in this latest programme is 29 October 2024. We are in constant engagement with BAM to ensure that the October 2024 substantial completion is achieved. All our efforts are focused on getting certainty on this date.

Regarding costs, the NPHDB has kept the HSE and the Department of Health informed of the potential cost implications of the extended timeline. The capital request was submitted to the HSE lead director on 31 May 2023. This is being considered by our stakeholders and as such I am precluded from discussing the details of those figures.

On claims, etc., the NPHDB has provided the committee a pack with details on the current claims status. BAM continues to submit large volumes of claims. Some 2,379 claims have been raised up to the end of September 2023. The substantiated value as claimed by BAM is €769 million. The employer’s representative has determined 1,610 claims at a value of €16.75 million and a further €2.1 million has been agreed through the dispute management processes. The additional €18.85 million is approximately 2% of the overall contract value.

The NPHDB is fully committed to delivering the new children’s hospital in a timely manner, delivering the best possible value to the State, to a standard and quality that the children of Ireland deserve and staff of CHI are proud to work in. We have worked and will continue to work with BAM to do all we can to ensure certainty on the completion date. We are acutely conscious of the need for certainty required by our colleagues in CHI. The substantial completion date of the building phase becomes the start date of the operational commissioning phase. I want to assure them and all members of the committee that we remain focused and fully committed to delivering the project.