We’ll have the most expensive children’s hospital in the world – the glaring question is: why?
HOW incredible it is that something as important and desirable as the new National Children’s Hospital has become a cause of controversy. The cost overruns in its construction may even constitute a scandal, considering the information that is emerging now: what, only six years ago, was slated to cost about €450million will now cost more than €1billion extra.
What is wrong with this country, feted for producing the workers who built the US and Britain, that we cannot bring a major building job in on time or on budget? Where is all the extra money going? Who benefits from the overspend?
We know who suffers. The consequences of the new estimate of €1.433billion are many. Other capital projects all around the country planned by the HSE have been delayed and some are in danger of being halted. This will affect new hospitals, or extensions or reconstructions, into which much-needed beds are due to go, or expenditure on crucial stepdown facilities, needed to move on people who no longer need hospital care but who are not well enough to go home.
Just as bad, there are massive delays in replacing outdated but crucial equipment.
This could cost lives.
Suitability
If, at the outset, if it had been known that the cost of the new project would be €1.433billion, would it have been approved? Was the likely cost deliberately understated? Or has control been lost and, if so, why?
The original estimate, made back in 2012 when the construction industry was on its knees and willing to do almost any work to keep cashflow coming in, always seemed optimistic. Remember, however, that it was used as justification for selling the National Lottery to the private sector. One public asset was to be sold to raise funds for another. Well, most certainly, that didn’t work out.
After all, when the planning application was made little more than two years ago, the price had gone up already to €675million. But considering what was on offer – a state-of-the-art hospital, brilliantly designed, to offer the best service possible to the sick children of Ireland – who could argue that this wasn’t a socially desirable project?
The decision was seen, too, as a sign that the country was returning to some good financial health – that it was freed of the shackles of oversight by the Troika which controlled the national finances between 2011 and 2014.
After all, we have been waiting too long for this particular hospital, as any parent who has attended Crumlin or Temple Street with a sick child will tell you. (The care offered is wonderful but the facilities are held together by what could be described as a sticking plaster). During the boom years there were plans to build the new hospital at the Mater site on the northside of Dublin, with a metro station underneath to boot. The idea was grandiose but wasn’t scrapped for financial reasons, but because of disagreement as to the suitability of the location.
There were arguments, too, over the suitability of the St James’s site. Many people felt it would be cheaper to build on a greenfield location, perhaps adjacent to the M50 to give speedier access for people outside of Dublin who had to travel with their sick children.
Desperate
We were told – and there was substance to the argument – that the new hospital would be best suited, for medical reasons, to a location alongside an adult hospital. That was accepted by most, despite reservations the cost of building on a socalled brownfield site in central Dublin would be large and that it might constitute overdevelopment of the area. Instead, and this was repeated in the Government’s statement yesterday, arguments were put forward that this would help in the regeneration of a decaying area of the city.
This was accepted on the basis that most interested people just wanted the project to go ahead.
But it seems now that the cost of preparing the land for building of the actual seven-storey building, complete with underground car park, was far larger than was budgeted for originally – although we have not been told why and how.
Even by September last it was known the costs of the project had soared to perhaps €1billion. Little more than ten weeks later it is over 40% higher again.
The Government, seemingly desperate not to allow work come to a halt, has sanctioned the progress to the second stage of work, the actual building of the hospital. However, Taoiseach Leo Varadkar couldn’t guarantee yesterday that €1.433billion will be the final price.
Worse, there are experts who believe that that price will only provide the shell. The kitting out of the hospital and the provision of IT could conceivably cost as much again.
There seems little doubt that we will get a hospital to be proud of when it is completed. But that doesn’t mean it should be the most expensive hospital ever built, anywhere.
Experts believe that only the Royal Adelaide Hospital in Australia, at €1.5billion, has cost more. But here’s the rub: the cost per bed for the Irish entity is estimated at €3million, as against €1.9million in Adelaide.
Debacle
This follows into a long-running pattern of overspending on major Irish projects. It has happened in the private sector too. But the public sector seems to be the worst offender because the expectation is that the State will pick up the tab, no matter what.
I remember when the original Luas lines were opened back in 2004. A government minister came on my radio show to boast how the two lines had been delivered on budget and on time. I laughed hard because that was only true of the final budget and deadline. Both had been changed so many times that everyone had forgotten the original estimates that had persuaded people in the first place that the investment was worthwhile.
Much the same could be said for the Port Tunnel or Terminal 2 at Dublin Airport. Both are essential pieces of infrastructure and we are glad that we have them, but it doesn’t mean that they didn’t cost way more than they should have.
A year ago the International Monetary Fund gave the Government a report on the delivery of infrastructure in this country and the value for money achieved by capital spending. It was very critical of much of what was done – and specifically raised concerns about the way the National Children’s Hospital project was being managed.
If anyone in Government noticed, they didn’t seem to care.
It may be too late to prevent the overspend on this hospital but that doesn’t mean we should be denied answers as to the original costings and budgets and how overruns have arisen.
It is essential we get answers because the Government has enormous plans to spend our money between now and 2040 on a range of infrastructure projects, including a new National Maternity Hospital and social housing and schools and many other things.
The money we have will get us only a fraction of what we could get if the debacle of the children’s hospital is repeated.