HARRIS KNEW OF €191M OVERSPEND IN AUGUST
SIMON Harris was informed that the new Children’s Hospital was €191million over budget as far back as August last year – and that the main contractor wanted a further €200million.
New memos released last night call into serious question the Health Minister’s assertion on Wednesday that he didn’t have ‘accurate figures’ for how much the project was going over budget until November, or that he knew it could reach ‘several hundred million euro’.
Sinn Féin last night called on the Taoiseach to remove Mr Harris from his role.
A memo titled ‘Urgent – New Children’s Hospital – Capital Cost Update’ was sent by an Assistant Secretary in the Department of Health to Mr Harris’s advisers on August 27 of last year, saying that it was for the Minister’s ‘urgent attention’. In the memo, which Mr Harris last night confirmed he was aware of, Tracey Conroy states that ‘it is apparent the construction budget is trending very significantly over budget’. She adds: ‘The current construction budget is estimated to be €191million over the value notified to government in April 2017.’
Ms Conroy states that [construction company] BAM had only days earlier submitted ‘substantial’ additional cost claims’ totalling €200million to the National Paediatric Hospital Development Board (NPHDB). This was in addition to the €191million in extra costs already outlined in the memo. ‘These additional costs will need to be questioned and assessed by the NPHDB in conjunction with its legal and design teams as a first step,’ she wrote.
The emergence of the memo will raise serious questions for the Health Minister – as well as for Fianna Fáil which has agreed to allow Fine Gael stay power for another year but which has been highly critical of the cost overruns.
Speaking at the Oireachtas Health Committee on Wednesday, Mr Harris said that he ‘didn’t know accurate figures until November 9’.
He added: ‘I would reject without being too pedantic the assertion that I knew of figures of several hundred million euro – I don’t believe that was the case.’
When asked on RTÉ’s Primetime last night about the cost escalations cited in the August 27 memo, Mr Harris said that the figure was ‘very much an estimate’ at the time and he didn’t have the full figures until November 9.
‘It’s a minister’s job not just to get partial information and act but actually to get all of the facts and then make informed decisions,’ he added. He also strongly rejected allegations that he knew the project had overrun by €391million and said the real figure was an estimated overrun of €191 million.
‘It wasn’t a €391million overrun... the contractor was looking for €200million more. The board said no and that was being rebuked and dealt with by the board.’
But in a statement last night Fianna Fáil health spokesman Stephen Donnelly said: ‘We now know that Minister Harris was aware last August that costs were potentially going to increase substantially up to €391million, at least, but he consciously chose to withhold that crucial information when asked in the Dáil back in September.’
Sinn Féin health spokesperin son Louise O’Reilly yesterday said that the Minister’s position is untenable.
‘The memo published this evening clearly shows that he was aware of a €391million overrun at the hospital as far back as August yet he did not inform his cabinet colleagues till November 9.’
Meanwhile, Labour health spokesman Labour TD Alan Kelly told the Irish Daily Mail that the new revelations meant Fianna Fáil ‘may as well not be there’ and that the party was a ‘patsy.’
But Fianna Fáil leadership source said: ‘We weren’t given the information on the overruns and that is categoric. They didn’t mislead us – they just withheld... With seven weeks to go, even to look for a head on a plate wouldn’t decrease the cost of that hospital by one cent.’
Call into question his claims ‘Fianna Fail was a patsy’
WHEN it comes to the issues arising in relation to the National Children’s Hospital project, we stated here last week that there were, essentially, two main questions to be answered. Firstly, we needed to know why the costs had risen so dramatically and that within that context, we also wanted those who were responsible to be identified. Who, in other words, was to blame? Secondly, we were entitled, we said, to know if the fact that there was an expenditure overrun had been deliberately withheld from the public.
Now, it appears, we are beginning to get a degree of clarity when it comes to these important questions. Certainly there is now more understanding about the specifics of the increased costs with confirmation Simon Harris knew, in August 2018, the actual building end of things was already €191million over, while an additional €200million was being sought by the builder that had not even been included in the original budget.
As the minutes from the Children’s Hospital Project and Programme’s September board meeting illustrate, the board was clearly shocked at the escalation in cost, to the extent that they discussed, in robust terms, how it should be challenged.
This still, however, leaves unanswered questions; how were the original building costs not watertight, and how on earth was there a failure to even budget for elements that would add another €200million to the bill? These are issues that still require a full explanation.
What we do now know is that last September, Jim Breslin, the secretary-general of the Department of Health, knew that the cost of the overrun was close to €400million. Yet Health Minister Simon Harris says that he was not aware of the final figure involved until November. It was even later before the budget overrun entered the public domain.
Earlier this week, Labour’s health spokesman, Alan Kelly, raised another pertinent question – was the failure to disclose the overrun in September related to the October Budget? Were the departmental mandarins worried that, if revealed, this massive overspend, despite being part of a multi-annual capital budget, would affect the Minister for Finance’s 2019 Budget?
Minister Harris now says that he didn’t share the figures with the Finance Minister ahead of the Budget because he needed more detail. Well, we all need more detail. And we have some questions. Such as, how can we have a capital spend process that allows these massively escalating costs go through simply because they are the leastworst option? And how can it be best to keep the Finance Minister, the Cabinet and the public in the dark about massive overspends on a public project?
These are the questions that still demand to be answered.