Catherine Byrne (Dublin South Central, Fine Gael) | Oireachtas source

I am taking this matter on behalf of the Minister, Deputy Harris. I begin by congratulating Deputy Wallace on his election as an MEP to the European Parliament. I wish him well. I am sure we will still hear his voice loud and clear from across the waters.

I want to remind the House of the significant progress that has been made on this project. After false starts and failures to build this hospital over many years, difficult issues such as planning, completing the enabling and underground works and contract negotiations have been dealt with and this project is now in the major construction phase.

Considerable work has already been undertaken on the project with Phase B, above ground works, well under way at the St. James’s site. Works at the paediatric outpatients and urgent care centre at Connolly Hospital are complete and the centre is on target for a phased opening from the end of July. Works at Tallaght outpatient department, OPD, urgent care centre are also under way with a target hand over date of July 2020.

The contract in place to build the hospital has allowed early phases of work to start while the detail on later phases was finalised and agreed, resulting in a saving in total delivery time. Another advantage of the contract approach is that it has brought issues on cost to the fore much earlier in the life of the project than is the case where traditional procurement approaches are deployed.

The contractors are now required to take all risk for quantities thereafter and their recovery of additional costs is limited to clearly defined scope changes and, post July 2019, inflation in excess of 4%. Given the cost escalation of this project over that originally committed to by Government in 2017, three options were considered in December 2018 for completing Phase B: carry on with the current contractor, retender in the hope of getting a lower quote, or break up the contract into smaller parts and retender.

The realistic and least risky option available to the Government in order to avoid long delay and, potentially, the non-delivery of a children’s hospital was to carry on with the current contractor for Phase B. Any change now would definitely create delay, very likely cost increases and significant contractual difficulties. All of these presuppose that other contractors would want to take on this project, which is not at all certain in the current construction environment.

As Deputies will be aware, the PwC report of the independent review into the escalation in the cost of the new children’s hospital was considered by Government on Tuesday, 9 April, and published that same day.

The Government noted the recommendations of the report and agreed that the Minister for Public Expenditure and Reform and the Minister for Health would revert to Government to outline an implementation plan for the recommendations contained in the report. Work in regard to this implementation plan is ongoing.

Any consideration of retendering at this stage ignores the contractual position, the substantial work done to date and runs the risk of delaying if not outright derailing this much-needed facility.

The focus now is on the enhancement of the delivery and oversight arrangements to reduce the risk of future cost increases to the greatest extent possible. This is a vital and much-needed project that will have a transformative effect on the provision of paediatric care in Ireland. I will respond to Deputy Wallace's questions.

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