Tuesday, 26 September 2023
Nithe i dtosach suíonna - Commencement Matters
Cuirim fáilte roimh an Aire Stáit. The national children's hospital is something we all want to see happen and we know its importance, but there continues to be growing concern about the cost and ensuring it is completed. James Reilly, who was the Minister for Health when this deal was originally drawn up and signed, indicated that it would cost €650 million. Planning was secured at the St. James's site in 2016, and the initial budget, as set out then, was €983 million. By December 2018. the then Minister, Deputy Simon Harris, indicated that the figure would be €1.433 billion and that there could be additional costs. By the end of 2021, Robert Watt, the Secretary General of the Department, said the cost would be higher than €1.7 billion. When I raised this as a Commencement matter in March 2022, the then junior Minister, Deputy Frankie Feighan, indicated that the cost would be €1.73 billion. We were told this July that it was anticipated that the cost of the national children's hospital will finally top €2 billion.
The deal that was signed by James Reilly with BAM seems to be out of control.People are losing confidence in getting this hospital completed. It certainly will not be completed on budget and it is not being completed on time. The indications I received when previously I raised this as a Commencement matter were that it would be completed towards the end of 2024, and I hope the Minister of State can reassure us that will be the case.
We need to know what the final budget is going to be and what is projected by the Department. I know, for instance, that the National Paediatric Hospital Development Board was concerned that BAM had achieved only 67% of its planned output levels in the past year. This is a significant concern, and the public are growing tired of the fact that every time they hear about the national children's hospital, it is not about the much-needed facilities we are going to have there but, instead, about what seem to be the costs running out of control. It is something on which we need complete clarity.
This all, obviously, began before the time of the Minister of State or the Minister for Health, and when in opposition, the Minister, Deputy Donnelly, raised the fact those controls did not seem to be in place. I am looking for assurances also regarding the much-needed national maternity hospital, another critical facility, co-located at St. Vincent's University Hospital. The tenders are currently out for the construction of the facility, but the public need to know that whatever deal is put in place, we will not see the kinds of cost spirals that we have seen at the national children's hospital. Will the Minister of State outline that what measures have been put in place concerning the national maternity hospital will ensure the debacle of the ongoing rise in costs at the children's hospital will not be repeated?
I thank the Senator for his question. Everybody in both this House and the Dáil is in agreement about the absolute necessity of the national children's hospital and the important role it will play for many young children and their families. I can understand, and hear in his voice, the Senator’s frustration at again raising this issue in the House. He raised it in March 2022 and he is now back with it again.
The new children's hospital project is the largest health capital project in the history of the State. It will transform the delivery of paediatric healthcare. It comprises the main hospitals at St. James's Hospital campus and two satellite facilities in Blanchardstown and Tallaght. Both satellite centres are now open, which is important to acknowledge. I am pleased to report that the construction and equipping phase of the main hospital is now approximately 90% complete against the contract value. The capital budget approved by the Government in 2018 is €1.433 billion, within which the contract value for construction is approximately €910 million. This capital budget has not been depleted, with €1.35 billion drawn down to date. There are also wider programme costs relating to the new ICT and electronic health record systems and the costs associated with the integration at the three existing children's hospitals. This brings the total programme's cost budget to €1.73 billion, the figure the Senator quoted. In 2018, there were costs not comprehended within the capital budget and they will need to be addressed, including the impact of the once-in-a-generation increase in construction inflation.
Unfortunately, the project will take longer than we would have hoped, and this too will add to the final cost. I reassure the Senator, however, that everything possible is being done to ensure this important project will be completed as soon and cost-effectively as possible. Definitive updates, or outturn forecasts on the final costs, cannot be provided at this time. Speculation of costs outside of the approved budget when a live contract is in place could adversely affect contractual relationships and, consequently, the project itself. Large healthcare infrastructural projects are difficult and expensive to build. We see this around the world; Ireland and the NCH are not unique in this regard. It is also important to dispel the myth that this is the most expensive hospital in the world; it simply is not. Unlike other hospitals internationally, it has been designed to be as enduring and adaptable as possible for 75 to 100 years, rather than the normal 25- to 30-year span.
Nevertheless, we must acknowledge that the national children's hospital project has had significant challenges.With challenges come learnings. The updated public spending code requires these learnings to form part of the plan for the relocation of the national maternity hospital to Elm Park. The national maternity hospital project team has had ongoing engagement with the National Paediatric Hospital Development Board, NPHDB, to inform the development of the national maternity hospital project. Lessons learned from the NCH have been, and will continue to be, incorporated into the plans for the national maternity hospital.
The business case for the national maternity hospital has also been subjected to the rigours of the updated public spending code. This included two additional independent expert reviews focused on issues such as cost, risk and ability to deliver the projects. The advices and learnings from those reviews have been integrated into the programme for the delivery of the national maternity hospital to mitigate, to the greatest extent possible, the risks and challenges arising in the delivery of major health infrastructure.
In July, the Cabinet approved the pre-tender business case for the new national maternity hospital. The procurement processes for the publication of a call for tenders are now well under way. After the process is complete, and prior to contract award, the updated final business case will be brought to Government for a decision to proceed based on the tender costs.
I thank the Minister of State. I and everyone else appreciate there is construction inflation but we are still talking about a hospital that is costing what, on the face of it, is looking like at least twice what was originally budgeted and we still do not have the final figure. Can the Minister of State assure us that the target for the national children's hospital to be open by the end of 2024 will still be met? Second, can she assure us that when the Government publishes the details of whoever has been awarded the tender for the national maternity hospital and the ballpark figure for the cost of constructing that hospital, the necessary safeguards will be in place as a result of this review to ensure the costs do not spiral out of control in the same way they did for the children's hospital?
I thank Senator Byrne and all the other Senators for their contributions on this matter. I acknowledge that the NCH project has faced extensive challenges. It is an extremely ambitious and complex project. It has faced unanticipated delays and it has been impacted by costs outside of the original budget. However, after months of engagement with the main contractor, BAM, a comprehensive programme for completion was received by the NPHDB on 18 July. The Senator is correct that in the last 12 months BAM only achieved 67% of its planned output and it fell as low as 34% at certain times. That is a concern. The programmes is under review to determine its compliance with the contract. If compliant, we will then have a date for substantial completion, which we will expect the contractor to meet.
It must not be forgotten what this project will ultimately deliver, namely, a world-class hospital that is unprecedented in scale, facilities and technological advancement. The project as a whole is transformational. I know everyone accepts that. It is important to ensure that lessons learned from previous projects inform all further investment decisions. As we move forward through the tender stages of the national maternity hospital project, the Minister is satisfied that we have the correct mechanisms and processes in place to navigate and avoid, as much as we can, many of the challenges faced by the national children's hospital project.