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Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: How many extra beds are we getting for this overspend? Will Mr. Pollock please answer the question?

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: Are we getting any extra beds?

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: I thank Mr. Pollock.

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: No, that is clearly not my question. How many extra beds are we getting for the considerable additional overspend that we are discussing this morning?

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: I do not accept the benchmarking used. Having looked through it in some detail, I think all sorts of costs have been left out. I do not accept the rationale for the benchmarking that has been used, according to which the cost of €2,500 per square metre four years ago now stands at €5,500 per square metre. The only explanation the witnesses seem to have given is that it...

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: I apologise for cutting across Mr. Costello because it is pushing towards the end of my time. The specific question I am asking is how many people have been fired so far because of the cost overruns and how many of the commercial contracts involved in the project have been cancelled because of them?

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: I am sorry to cut across Mr. Costello again, but I do so in the interests of time. Has a single commercial contract been cancelled?

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: Thank you.

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: I can see plenty of bases. Has a single person lost his or her job over this anywhere?

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: Yes or no?

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: I understand the calibre and I am not asking about it; rather, I am asking a simple, direct question. Has a single person lost his or her job? Yes or no?

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: Earlier Mr. Costello explained to a member of the committee that the quantities had been wrongly calculated to the tune of hundreds of millions of euro of taxpayer's money. Hundreds of millions of euro was added because the amount of materials needed to build the hospital had been underestimated. When it was sought to pull some of the costs back, amazingly, mistakes were not made in the...

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: Mr. Costello is right that it is complex, but given all of the complexity, is it not amazing that the cost only seems to go up? Complexity never seems to mean that costs will go down. As the Chairman said, complexity is difficult, but it can be anticipated and budgeted for. However, it appears that it just means underestimation.

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: It is at the risk of the contractors now that the price has gone up. A fixed-price contract works before the price escalates. It does not work afterwards.

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: Sure. Mr. Costello has stated several times that the risk is now on the contractor, as essentially this is a fixed-price contract.

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: Mr. Costello is missing the point entirely. The risk has been wholly costed in this and it is being borne by the taxpayer. If this came in at the average price of a hospital, I would say it was fair enough. A hospital is to be built and we would have agreed a price that was approximately how much it cost to build hospitals, so the risk would be with the contractor. The reality is this...

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: I thank Mr. Costello.

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: I understand all of that and, in fairness, the delegates have laid it out. On that point - the profit margin of the main contractor - the initial bid was €687 million. It would have included a profit margin, an internal rate of return, a return on invested capital or whatever metric the contractor wanted to use. There will be a net current value of the contract. Given that there is...

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: Therefore, the margin has not increased.

Joint Oireachtas Committee on Health: National Children’s Hospital: National Paediatric Hospital Development Board (16 Jan 2019)

Stephen Donnelly: Does the board not have an open book with the contractor for a bill of quantities?

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