Seán Canney (Galway East, Independent) | Oireachtas source

It is clear from the debate that everybody in the House shares a commitment and determination to ensure that the children and young people of Ireland and their families can access world-class health services as soon as possible.

This project presents a once-off opportunity to deliver adult, maternity and paediatric services on a single campus. The benefits of tri-location of a children’s hospital, maternity hospital and adult hospital are well established and this is provided for in the St. James's site master plan. A greenfield site does not give the benefits that tri-location presents. The children’s hospital on this campus will be also be a research-intensive academic healthcare institution. The establishment of the children’s research and innovation centre on the St James's campus will help support and embed a culture of research, education and innovation in modern paediatric practice in Ireland.

At an early stage in the procurement process, it was determined that a traditional method of procurement was not suitable or realistic for a project of this size and complexity. The difficulties around adopting a design and build tendering strategy on large public sector projects had already been recognised, and this informed the decision by the National Paediatric Hospital Development Board to adopt a two-stage procurement process. This strategy was intended to deliver key objectives and deliverables for the project in compliance with strict public and EU procurement rules and to reduce risk.

The two-stage procurement process has brought issues to the fore. It has allowed claims to be addressed upfront, prior to main construction, rather than as is traditional throughout the project and beyond. It helped reduce the exposure of the project to increasing inflationary pressures in the construction market through procurement at 2016 tender market rates rather than 2018 rates. Finally, it allows a GMP to be determined, with this only adjustable for clearly defined exclusions such as changes in scope, excess national construction tender inflation above 4% post-July 2018 as per the average of three published tender price indices and changes in legislation such as VAT, statutory labour rates or building regulations. This means that other than in respect of these exclusions, any amount in excess of the GMP ceiling cannot be recovered by the contractors. This two-stage approach would also deliver the hospital as soon as possible, mitigating the time lost following the Mater site planning application refusal. This approach allowed early commencement on-site, two years ahead of traditional procurement. Let us make no mistake - considerable work has been undertaken on the project since 2017.

When the Minister for Health was faced with this cost overrun, he had three options. The first was to pause the project and the second was to retender the project. However, the expert advice was that retendering the project would have cost more for the taxpayer above and beyond the significant existing cost and would have increased the time it would take to deliver this project. The third option was to proceed, which is the decision that the Minister and the Government took. The increase in costs for this project was not envisioned and is certainly not welcomed by this Government or me. It is precisely because of this that the Government has commissioned an independent report to examine the project to date and learn from the issues that have arisen in the project thus far. The HSE engaged PwC because a framework agreement is in place and it could be taken in straight away. The Government will carefully review the report of the independent review when is made available.

There is a will to review and act on the lessons learned from this project to date. The Minister for Health has made it clear that his Department will work with all stakeholders to ensure all weaknesses are identified and comprehensively and speedily resolved, and that robust governance and oversight arrangements can be put in place to ensure the completion of this project on time without any further surprises.

Lessons are being acted upon. The Minister for Public Expenditure and Reform has made it clear that the experience of the new children’s hospital cost overrun must be drawn upon and lessons learned. He recently announced that the State is speeding up the reforms to our public procurement process put in train as part of Project Ireland 2040. As part of these reforms, the Government will now no longer pre-commit to major bespoke projects until there is clarity on tendered costs; in the future, the budgets for large bespoke projects will include a significant premium for risks in order that these indicative costs more adequately reflect the holistic total for the entire project over its life cycle.

We must not lose sight of the fact that we must strive to deliver on the promise of improved service delivery to the young people of Ireland and their parents. They matter, their care matters and their needs are a priority that we now have the opportunity to address well. There is a desire in this House to provide for the improvement of services to sick children and their families. There have been serious issues but now that we have a project under way that will truly redefine the standard and quality of care available to the young people of Ireland, we cannot let it be sidetracked or delayed. It is vital that we learn lessons but also that we continue to advance this project without unnecessary delay and build this hospital that is so badly needed for the children of Ireland. It has been eloquently argued by everybody that we have been talking about this since the 1990s. The Minister for Health and this Government remain committed to delivering on the vision to improve services for the children and young people of Ireland and to continue to make progress on the new children’s hospital project on the St James's campus, and at Tallaght and Connolly hospitals.

This project is about more than just building works; it is about the difference we will make to children and young people by implementing a new model of care in a timely fashion. One evident practical benefit is that the outpatient and urgent care centre at Connolly hospital will start delivering improvements to healthcare for children this year under the responsibility of Children's Health Ireland.

We truly are at a period in time when we have an unprecedented opportunity to deliver a hugely positive change in healthcare for Ireland's children and young people. Finally, I invite Members of this House to join with me in ensuring that, while recognising and meeting legitimate concerns, we get on with delivering this vital project.

Regarding Deputy Healy's queries, the HSE is developing its capital plan for 2019, which will be published very shortly. This plan will set out what is happening for 2019.

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