Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

The capital build cost of the project is €1,433 million. That includes the entire capital cost for the main hospital at St. James's which will also house the school and third level educational spaces, the outpatient and urgent care centres I mentioned at Connolly and Tallaght hospitals, equipment for the three sites and construction of the car park and retail spaces.

These same elements made up the capital cost figure of €983 million, which was reported to the Government in April 2017.

With regard to my knowledge of the additional rising costs, I was informed that the costs looked like they were escalating again probably at some time around the end of November and I asked for full information, as is always the case when I am told something. I got that full information only a day or two before the particular Cabinet meeting in December. The additional cost, €319 million, relates to construction, and the balance of that, €131 million, includes €50 million in VAT. Other costs relate to staff, consultants, planning and design teams, risk and contingency, and the management equipment service. The construction cost is €1.433 billion. I acknowledged in the Dáil the day after that this could rise. Obviously with construction inflation continuing, any delay potentially adds to the cost. The cost of the hospital can involve more than the construction. It is also necessary to equip it. That can be done either by buying the equipment or through a management equipment service contract whereby the equipment is not bought but leased and maintained on a long-term basis.

Why did the cost go up? There are number of reasons, which have been explained. These include construction inflation, fire safety rules that required a much more expensive sprinkler system - very much more expensive - and a miscalculation of the cost of electrics and cabling. The board got the latter wrong. Obviously, any time the cost goes up, the VAT goes up also. We should not forget that some of the figures being bandied around do not include VAT.

With regard to further inquiries, the Department of Health has retained PricewaterhouseCoopers, PwC, the expert accountancy and consultancy firm, to carry out an analysis of this and to report back to the Government in a few months with more information as to how the costs escalated in the way they did.

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