Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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215. To ask the Minister for Health the costs regarding the increased quotation from €600,000 to the latest quote for the building of the new children's hospital; the reason for the increases; and if he will make a statement on the matter. [23722/17]

Simon Harris (Wicklow, Fine Gael)
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An internationally recognised design team, supported by an experienced National Paediatric Hospital Development Board (NPHDB) and Project Team are in place to drive the project to develop the new children’s hospital and focus on delivering the project in accordance with national policy to optimal design and value for money. They have followed best international design, planning and procurement processes at each stage of the project.

In 2014 the Exchequer approved €650m of HSE capital funding following an initial cost estimate of the construction aspects of the new children's hospital project. This covered the core elements (new children’s hospital and 2 Paediatric OPD and Urgent Care Centres) of the hospital construction only. The €650m funding did not include equipment, educational facilities or commercial elements such as retail and car parking. Alternative funding sources were identified for these elements, estimated to cost €140m. This brought the NPHDB 2014 cost estimate to €790m. In 2015, additional shared services for the campus were included in the project bringing the overall cost estimate to €800m.

Following the evaluation by the NPHDB in early 2017 of main construction tenders and the selection of preferred contractors, the final cost of the design, build and equipment programme for which the NPHDB is responsible has increased. This increase has been led primarily by three factors. First, there has been an increase in projected construction inflation over the project duration of 2014-2021. At the time of the cost estimate in 2014, construction inflation was running at 3% per annum in 2014 and is now running at over 9% per annum. Second, the extended programme timeframe has seen longer than anticipated planning, procurement and approvals processes. Third, market costs of the tenders came in at higher than forecast. These three factors bring the cost from the estimate of €800m to €983m for all elements of construction cost and equipping. Of the €983m, some €916m is Exchequer capital and €67m is to be funded through commercial and philanthropy sources. The final construction elements of the project compare favourably to the costs of international projects of a similar size and scale.