Billy Kelleher (Cork North Central, Fianna Fail)
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204. To ask the Minister for Health the reason the €560 million estimate to build the new children's hospital provided by his predecessor to Dáil Éireann in 2012 has been at such variance from the final tender; if it is correct that a €1 billion cost has now been agreed for the building of the project; the estimates for the costs of information technology and for other equipment necessary for the fitting out of the hospital; and the current final estimate for the full completion of the project. [6563/17]

Billy Kelleher (Cork North Central, Fianna Fail)
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205. To ask the Minister for Health the estimated cost per bed in the new children's hospital; and the reason it varies so much from the normal €1 million capital cost per bed previously provided in HSE estimates. [6564/17]

Simon Harris (Wicklow, Fine Gael)
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I propose to take Questions Nos. 204 and 205 together.

At the outset I would like to emphasise again that the project to develop the new children’s hospital is an extraordinary opportunity to enhance paediatric services for children. The granting of planning permission in April 2016 for the hospital, satellite centres and related buildings was a huge and very welcome milestone for the project. An internationally recognised design team, supported by an experienced National Paediatric Hospital Development Board and Project Team, are in place to drive the new children’s hospital project and to ensure that the project is delivered in accordance with national policy to optimal design and value for money.

In relation to funding, the figure of €650 million for the hospital relates to Exchequer funding that was approved in 2014 for the core construction of the new children's hospital together with the two Satellite Centres. This funding was approved following a cost estimate that commenced in 2013 and which was completed in early 2014. At this time, construction inflation was estimated at 3%.

The tender process for the core construction elements for the new children’s hospital and the Satellite Centres at Connolly Hospital and Tallaght Hospital has recently been completed. The pricing proposed by the tenderers took account of construction inflation, which is now running at higher than 9%, the extended project timeline which is now scheduled to be completed in 2021, and the final market cost of the build.

Local and international companies participated in the tender process. More than 35 people participated in review panels for the tenders. The tenders were reviewed and measured against a number of technical and financial criteria and were independently peer-reviewed by construction experts with extensive experience of projects of this size and complexity. I understand that it was a highly competitive process and following the conclusion, a company has been notified that it is the preferred bidder.

While there has been much media speculation about the cost of building this hospital, I am informed that the final proposed construction cost is actually within 5% of projections and the successful party was the one with the most competitive tender. The Department is aware from the National Paediatric Hospital Development Board that the tendered construction costs per bed as suggested in recent media commentary are not accurate and do not resemble the actual tender costs.

The construction tender does not include equipment which will be funded through annual operational expenditure or ICT costs. These elements of the project were always to be funded and procured separately. Funding for educational facilities and commercial elements such as retail and car parking were also separately identified from the core construction costs for the new children’s hospital.

The Deputy will be aware that the new children’s hospital and satellite centres programme is made up of three inter-related elements, the building, the ICT infrastructure and the operational integration. It includes the change management needed in order for the three existing hospitals to become one and the actions required to ensure the smooth, safe and efficient transition to the satellite centres and new children’s hospital.Work is ongoing to finalise the heads of bill to merge the three existing children’s hospitals into one entity to further facilitate this service integration.

This complex programme of work is set out the Definitive Business Case for the new hospital which includes the capital, ICT and integration costs. Now that the construction tenders have been completed, the capitalcosts put forward in the preferred tenders have been incorporated into the Definitive Business Case. This has been submitted to the HSE recently for final review, after which it will be considered by the Department of Health. I intend to bring the Definitive Business Case to Government in the coming weeks for decision.

The Department of Health continues to work closely with the HSE, the Children's Hospital Group Board and the Development Board to ensure that we deliver a world class hospital needed and wanted by children, young people, their families and the staff in the three children’s hospitals.